Know What’s Critical for Supply Management Success?

Published on 2014-10-23 07:30:14, author Kenneth G. Sullivan

A problem exists with some Purchasing personnel in the private sector and most that work in the public sector. There is something that is amiss. An important part of the Supply Management strategic arsenal remains largely misunderstood, under-appreciated and under-utilized. And, it is the main reason for the existence of the Purchasing and Supply Management function. It is the Suppliers.

Mention the word “Suppliers” to Purchasing personnel and watch their eyebrows rise up. Too often, they are viewed as villains and slaves in the eyes of their purchasing masters. Masters that really do not know the suppliers that they their work with (and on whom most of their success depends).

Is it enough to know only that DuPont provides chemicals, that Parlex produces flexible circuit boards or that Indofood is a producer of food products? Or should Purchasing and Supply Management know more about them?

Suppliers exist to provide solutions to real problems within companies and institutions. Problems that companies and institutions cannot solve on their own. It is Purchasing and Supply Management’s job to match the best solution to the needs and wants of the business or government. To do this, they must know the suppliers. The provision of a tender is not the main way that this occurs but only the finalization and conversion of the opportunity into an award. Most tenders never allocate appropriate time for the full consideration and analysis of the suppliers. And by the way, people (who expect the government to deliver the best solutions) demand that their tax money be used in a most responsible manner. It is a requirement.

When a purchase requisition is initiated the clock has begun ticking. The end-user expects purchasing to quickly go about the process to acquire the purchased product or service. Purchasing personnel that operate in a reactive manner are unable to respond adequately. Unless, they have sufficient analytical tools.

The process of knowing and understanding suppliers potential capability must occur well prior to the requisition and the onset of the tender. This is the reason for having a system that identifies suppliers, reviews and analyzes supplier capability and measures supplier performance. Supply Management professionals that are proactive don’t wait for requisitions to cross their desks before taking action.

So the question remains, how well do you know your suppliers? Keeping your door open and welcoming suppliers to visit your office is at least a start…having the right tools is even better.

Next Up: What Should Supply Management Know About Suppliers

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