“If done correctly, supplier development reduces your total cost of ownership. It reduces risk, it increases innovation and it increases agility within your supply chains. It sounds like everything that procurement has been focused on for so long, working in a different way outside of just the pure price negotiation to add value for our stakeholders and our organization.” – Amanda Prochaska
Whether you call it supplier performance management or supplier relationship management, procurement has always understood that we need supply partners at their best for us to realize the maximum ROI from each contract. Usually, however, that boils down to a meeting where we point out where they could be doing better or ask a bunch of questions that imply the same thing and send them on their way to figure out how they should improve. It basically amounts to procurement making a wish list and throwing it over the wall.
Needless to say, this delivers questionable results. Procurement doesn’t have the time required to follow up with as many suppliers as we should, and the suppliers don’t have an incentive to put more energy than absolutely necessary into a contract they have already signed. Besides, they’re often not sure exactly what we want from them.
In this disconnect, Amanda Prochaska, President and CEO of HPP Coach, and Jonathan Townsley, a Business Transformation and Supply Management Advisor, see an opportunity for procurement to meaningfully and sustainably change the way we manage our suppliers.
In this conversation, Amanda and Jonathan describe:
The pendulum shift from a total focus on technology to a focus on the total supplier lifecycle, and what procurement needs to start doing differently as a result
Why procurement’s knowledge, specifically about how to leverage supplier capabilities for the sake of competitive advantage, is the key to becoming a trusted business partner.
How procurement can assist suppliers that are at risk of being replaced due to poor performance – and why it is in our best interests to do so.
What steps procurement can take to get a truly effective supplier development program started.
