Suppliers need the right data to be productive. Plain and simple. They also need to know how they plug into your procurement process. Seems reasonable. They need to know the right ways to interact with different stakeholders (clients, buyers, engineering, etc.). Also seems like a no-brainer. Why then, are so many companies neglecting these core principles of supplier management?
Let’s start with getting suppliers the right data. As I mentioned earlier, suppliers need the latest revision of engineering material to make accurate bids. If they are looking at the wrong drawings and specs – they are going to bid on the wrong design. To prevent this, there are many document management systems out there that send notifications to any stakeholder notifying them that a document has a new revision. The bare minimum here is having a system like that and hooking the supplier up with a license and the appropriate notifications. A better way is to deliver online bids from a procurement system that integrates with document control, so only the latest revisions are accessible. The best route is a combination of online bid forms that integrate with the document control application and email notifications. However you manage it – giving suppliers the latest data is going to improve quality, cost, and schedule.
Next is integrating suppliers into your procurement process. Integrating suppliers makes them feel like part of the team, making them more likely to work as cooperative team members than adversarial. Again, cooperative suppliers is going to improve quality, cost, and schedule in addition to making your buyer’s quality of life much better.
Integrating suppliers is pretty simple. Lay out the rules, provide a structured framework for them to participate, and enforce the rules you set. This can take some time as many suppliers are conditioned to take the adversarial stance once they have won the PO. A good way to start is to quit having phone conversations and using emails to communicate. Instead use an online system to solicit online bids, distribute documents, and manage communication. The right procurement system will lay out the rules, provide the framework, and enforce participation within the established boundaries.
Finally, suppliers need a better way to interact with stakeholders than email. If email is allowed, the supplier may not be able to resist the urge to exploit the inherent deficiencies of email communication. They may email the wrong person, send the wrong information, or use other shady tactics to their advantage. One way to fix this is to only allow a single point of contact and make sure each buyer and engineer refers the supplier back to the contact owner. However, the ideal way to fix this is to execute technical and commercial queries in your procurement system. I previously talked about having an online supplier portal where suppliers can receive documents, enter bids, submit bids, receive/manage POs. Another important piece to the supplier portal puzzle is giving suppliers the ability to initiate and respond to technical and commercial queries. These queries should be directed to buyers who can route the query to the appropriate authority (engineering, contracts, construction, logistics, etc.)
Taking the above (relatively simple) steps can align your suppliers with procurement and engineering which will improve cost, quality, and schedule for your procured goods and equipment.