Buyers back supplier charters despite risk of stifling innovation

Will Green is news editor of Supply Management
27 August 2014

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27 August 2014 | Will Green

Buyers have backed the use of charters that set out the “rules of engagement” in supplier relationships, according to a survey.

The SM Jury voted by eight to four in favour of charters, with members saying they promoted ethical behaviour and improved supplier relations.

Cristian Martin, procurement and contracts officer at the Commonwealth Secretariat, said: “It is important for suppliers to understand what standards your process is aligned to; everyone understands what everyone’s rights are. If you are not aligning to a standard, a charter would help suppliers understand your process better.”

Brian Grew, senior vice president of commercial relationships at Live Nation, said: “A charter can outline the rules of engagement between a buying organisation and its suppliers.

“But a word of caution: be concise and clear on what is in the charter: the producing organisation will be held to account in a way that the supplier may not.”

Florence Muiu, procurement officer at Kenya Ports Authority, supported charters but warned they might stifle innovation. “A charter guide for buyers might work where buyers do not have experience and they can refer to the charter on what to do,” she said. “But the published charter may tie down buyers and make us less innovative.”

The question was prompted when Australian supermarket Coles published a charter after legal action was launched against the firm for the way it treated suppliers.

A poll on the SM website backed the Jury’s verdict, with 79 per cent of votes in favour of charters.

However, Jon Randles, group purchasing manager for Gap, voted ‘no’. “I do not see any value in having a published charter,” he said. “As professional CIPS-qualified buyers we already work to a code of conduct. I see more value in the supplying company having a charter for how their representatives go about their business.”

Tony Morris, senior procurement management consultant at SPC, said: “Most of the time the buyer-supplier relationship is a good one,” he said. “I really don’t think a knee-jerk reaction should dictate policy. We don’t want to make rules for the majority where only the minority are affected.”

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