Suppliers are not afraid to sue

3 July 2009
Earlier this year SM held a roundtable debate quizzing CPOs on whether they thought good supplier relationship management would fall victim to the recession. Their overwhelming advice was, it could – but it shouldn’t. “The supply base brings more arms and legs to focus on removing waste. They can bring us ideas, for example, stacking pallets in a more efficient way to unlock some value,” said NHS Supply Chain’s procurement director Roger West talking about vendors’ role in innovation. “Being easy to do business with is also hugely important. Some customers are not good at telling you what they need or at the purchase orders and payment processes. Other customers are slick and professional: they are the ones you want to do business with,” added Paul Bestford, senior director, procurement EMEA, Wyeth. They’re not alone. In April last year we spoke to purchasers who’d lived through the last recession to seek their views on what will be different this time. One of them was Michael Pitchford, who was working first in avionics and then in the City during the recession of the early 1990s, and is now a procurement trainer. He said: "In the 1990s we didn't have partnering. Now it is a force to be reckoned with, and we're basing our decisions on relationship strategies." And now recruitment agency Edbury Daley has launched a survey entitled A study into the increasing importance of Supplier Management which seeks your views on the issue. All the expert advice highlights the importance of these relationships, yet legal challenges are on the increase – particularly from suppliers but also buyers. Paying promptly as well as ensuring all the i’s are dotted and t’s crossed in contracts (and tenders carried out correctly) has never been more crucial. Strong bonds based on plenty of communication could just give you the edge – and save you a heap.
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