It’s time to hit reset on these 3 aspects of supplier management

Companies have had nearly a year to adapt their service levels to the pandemic, and workarounds should be baked into service blueprints.
“I hope your visit to our service department this morning was an exceptional experience,” said the service manager at my local automobile dealer as he was processing my credit card. “We look forward to seeing you again for your next scheduled maintenance appointment.”
Was it an exceptional experience? No. But it was comfortably normal and the excellent service experience I had come to expect from this dealership.
Were there differences? Sure. Fewer chairs in the customer lounge, embargoed snacks and drinks, large bottles of hand sanitizer on all tables and a mask mandate for customers and employees.
But just as in normal times, I got a service reminder by email and scheduled my appointment online in two clicks. I even received a 10% customer loyalty discount.
Companies have had nearly a year to adapt their service levels to the pandemic. Uncertainty in the supplier community should have been replaced with firm plans and strategies, with workarounds baked into already established service blueprints.
By now, procurement professionals have a pretty good idea about the winners and losers in their supply chain. Here are three areas that demand a strong reset as we begin to return to more normal business operations.

Reset the supplier performance clock

We’ve dealt with this pandemic for a year and we are all anxious, tired and frustrated. While the situation remains tense, the deployment of the vaccine, an increase in therapeutics and a better understanding of the virus puts us in a stronger position going forward.
Most economic pundits forecast a very strong 2021 economy, coupling the distribution of the vaccine with economic stimulus.
Put suppliers on notice that the return to normalcy begins now. Suppliers should be ready to restaff operations, update medium- and long-term plans and solidify their supply chains for a very quick response to pent up industrial and consumer demand.
Your critical suppliers, and theirs, should already be gearing up for the projected surge in business. Validate their plans and share yours.

Reset supplier service expectations

Patience for excuses declines as the pandemic becomes part of the fabric of life, at least for the foreseeable future. The “well, we’re in a pandemic, you know” justification for poor service is quickly losing credibility.
Sure, many companies have had to endure horrible impacts on their business, and many have not survived. No company has escaped this pandemic unchanged and most are in a recovery period. Empathy is still important. But there are limits. Harden your expectations.
Be straightforward and truthful with suppliers about renewed service requirements. And those expectations may actually be more stringent than in pre-pandemic levels. High service levels from suppliers are critical to keep forward momentum by meeting customer needs and strengthening financial performance.

Reset supplier relationships

It’s time to make some very tough decisions about suppliers.
Surviving ones may have changed their leadership, market strategies, cost structure, day-to-day sales and customer service contracts. They may have changed their product mix, essentially disqualifying themselves as a viable source. And since communication has faltered during the pandemic, you might not know about these changes until you cannot place the next order.
Suppliers with previously strong relationships may be totally different companies. Relationships may need to be reestablished or even ended. Others may now be willing to deepen their relationship as they see which of their customers has survived the turmoil of the past year.
Now is the perfect time to reset the relationship around operational and service performance and communication. It may also be a good opportunity to enter into long-term negotiations, especially to head off anticipated capacity and supply constraints.
As the arc of the pandemic slowly bends toward its decline, patience for transitioning to the evolving normal has an expiration date. Companies that are flexible and adapt to changing conditions will lead in the recovery. Those that use the pandemic as an ongoing excuse for mediocre service will be left behind.

 

Source: www.supplychaindive.com– Rich Weissman -21/01/2021