- 20
- JUL
- 2011
Proactive supplier development: win together, lose on your own
Author: Ian George - Categories: Supplier Relationship Management, Procurement Strategy
Many organisations accept the need for a business strategy that will guide their development and performance objectives. But, how many organisations look beyond their own boundaries to the supplier network that feeds them with resources and competencies?
If you want to be at the cutting edge of development and market offerings then you need to have suppliers that are also at the forefront. Obviously, followers don't have this problem (or the profits).
This is perhaps a little more complex than it might first appear. We need marketing roadmaps (realistic ones with a basis in fact) to be split into products and services, sequenced into evolving internal capabilities linked to supply requirements, aligned with supplier competencies, supported by supplier strategies and development programmes, and implemented through nurtured relationships.
Given the complexity and interdependence that exists between customer and supplier, should we be willing to hope that all network partners will reach the same point at the same time? Few would willingly take on such a huge gamble. Fewer still would want to stake their reputations and careers on such an outcome - yet they do, time and time again.
Organisations such as NATO and the emergency services are built up from independent, but also interdependent, organisations. They recognise this and the potential pitfalls that it brings. They often spend time on joint exercises, working through scenarios, checking outcomes and ironing out those little snags. There is a salient lesson that business can learn from this approach. Launching a new product or service can be the single biggest factor in the sustainable success of an organisation. Despite this, it's not unusual to see mass heroics as managers throw themselves into the flames of impending doom to save the latest stage of a new project.
The strategic solution is to take a long-term view with suppliers and work together towards the achievement of mutually compatible business objectives, getting things right during times of relative calm. This doesn't mean taking responsibility for them or their performance; some may fall by the wayside on the journey. What is fundamental to success is the ability to develop a critical mass of suppliers that are able to support the evolving needs of the organisation and engage in a productive way when things don't go to plan.
