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8 March 2013 | Adam Leach
The majority of buyers will give a supplier a final warning before taking the decision to stop doing business with them, according to the latest SM100 poll.
When asked ‘do you give suppliers a final warning?’, 77 per cent said they did offer vendors a last chance, while 23 per cent said they did not take such action.
Respondents reported the answer is not always cut and dry, and approaches varied dependant on how critical to the business the supplier is.
Natalie Henfrey, a senior consultant at Crimson & Co, responded yes, but said it is a complex issue. She told SM: “If an organisation has categorised its suppliers correctly, then certain crucial suppliers should be on a final warning system. For example, in the drinks industry, you would have a final warning system in place for a glass bottle supplier but probably not for the office plants and flowers provider.”
Brian Grew, vice president of commercial at events company Live Nation, said: “Final warnings can be a useful tool in reserving a company’s position while enabling the offending party to get back on track.”
Robert Millward, contracts manager at the North West, South West & Wales Forensic Contracts Management Team, doesn’t issue a final warning to his suppliers. He explained one factor that could complicate the cancellation approach is how specialised the category is, particularly with regard to what else is available in the market.