Procurement has been discussing the nature of supplier relationships for a long time. It started with the debate between labeling them suppliers versus ‘vendors’ and expanded into partnerships, collaboration, and – most importantly – trust. After all, if you don’t trust your suppliers, should you really be doing business with them?
Usually this is an abstract concept, but in the case of supply market intelligence, it raises a critical question. Should procurement consider suppliers an appropriate (trustworthy) source of supply market intelligence?
This question was raised in a fall 2021 AOP Live session with Sherri Barnes, ProcureAbility’s Director of Market Intelligence Services, and Kristen Rellihan, one of their Senior Advisory Managers. They were focused specifically on how procurement can be successful despite the uncertain market dynamics we have all come to accept as the status quo.
When Philip Ideson asks Kristen about including suppliers in the intelligence gathering process she reminded the audience about one of the critical steps in all research: quality assurance.
If procurement has access to third-party created or validated industry/category research, they may need to assess it for context, expiration date, or fit based on what the category means to their business, but they don’t usually have to question whether or not it is true. But there are a lot of procurement professionals who rely almost exclusively on the Internet for their market intelligence. What is required in those circumstances?
All information gathered from free/open-source locations should be evaluated for quality. The information we gather from suppliers is no different.
That doesn’t mean that procurement shouldn’t consider the supplier’s motive or point of view in sharing market insight… but we should take the same approach we would follow to validate content authored by ‘experts’ and made freely available on the Internet.
In fact, suppliers deserve MORE consideration than unknown sources of information. Being wrong could cost them business. If procurement doesn’t trust them, that’s a sign of a problem, and if the information the share turns out to be false, that is another. Incumbent suppliers should be given the opportunity to provide input into market conditions, as should stakeholders and prospective suppliers. Procurement’s role is to evaluate all of the information – in context – and make recommendations to the business based on a well-rounded understanding of market conditions. Without suppliers’ input, those recommendations will be missing a key component – even if procurement does have to validate their perspective.
Listen to the full episode here: