With Claire Rayner’s recent death I have been reflecting on the role of the agony aunt and if it can extend beyond personal relationships.
My conclusion is that procurement definitely needs one – somewhere to go for advice about sensitive, delicate and embarrassing issues.
There are many questions I would have liked to ask during my career. Here are just a few I have been asked:
Q1: Dear Sam, I think my supplier wants to split up with me. They keep being difficult and are argumentative over the smallest detail. I think they’d like to terminate our relationship but don’t want to be the one to finish it. What can I do?
A1: Dear reader, passive-aggressive behaviour by a supplier is not uncommon. Once the first flush has worn off and the upfront fees have been banked, a supplier can often find the hard work of a partnership to be not as profitable as their initial calculations led them to believe. They may want to leave a contract which is no longer providing them the easy gratification of the early days, but are reluctant to instigate the break-up for fear of the fees incurred. Reinvigorate the governance processes within the contract. Create an environment where they can talk about the barriers to success but be clear about the output you require. Be proactive or both organisations will disengage or go into battle.
Q2: Dear Sam, I’ve been with my supplier for several years now but things are in a rut. I want to leave but I’m not sure I’d find anyone better - should I just stay with my supplier as they‘re all the same in the end anyway?
A2: Dear reader, don’t believe you can’t change things. If the supplier has other successful engagements then look inwards. Sometimes the problems lie in the way the buying organisation interacts with the supplier, in particular around fulfilling the buyer’s obligations, for example demand forecasting, payment on time or technical approvals. Once you address these issues you not only become more attractive to the supplier you are working with but also to others as well. If looking inward doesn’t help, make sure you understand who else is out there and what they offer – don’t move in anger.
Q3: Dear Sam, I think my supplier is playing away. Whenever I need them to do something for me, they always seem to be busy with someone else. I’m tired of being second best - what can I do?
A3: Dear reader, suppliers will often get distracted chasing new business. Work with them to establish the non-contractual value-add activities such as being a key reference or a test-bed for innovation and then insist on continuity of people and senior engagement in return.
In true agony aunt style my simple SRM tips are:
* Sam Covell is head of IS
procurement at AstraZeneca
- Understand the importance of each supplier to your business – just because you spend a lot of money with someone doesn’t mean they can’t be replaced.
- Always make sure you have a contract in place that deals with performance management, exit and dispute resolution. Follow the processes in the contract.
- Don’t get entrenched in your views. Is the contract still fit for purpose? Market, business and technologies can all change quickly.
- The real issue isn’t always about money. Sometimes the contract can be amended with little impact to the customer but it can make all the difference for the supplier.
- The person who says “we will have failed if we have to resort to the contract” is generally the person with most to lose if we do.