Did you know the reason most Operations and Procurement people give for wanting to change suppliers is lack of Innovation? This is not the full story. Let me take you behind this curtain.
Like in most relationships both parties want to feel loved, appreciated and know that the other party will be there when things go South. In long term relationships both parties can start to become complacent and the shakeup normally comes in the shape of someone new joining the department or organization. These people invariably want to make their mark and then the questions regarding cost, delivery, benchmarking, who/what is new in this area etc i.e. the "what have you done for me lately?" starts.
If by this investigation they establish that a) their organization has been paying over the odds for the goods and/or services, b) their supplier has been foisting old technology off on their organization, c) their supplier has not brought new ideas/innovation to the table, etc, then suppliers beware, the writing is on the wall, your days are numbered. The sense of betrayal the client feels is devastating. The client’s personnel realize that their organization have been taken advantage of and that the supplier’s in this relationship to line their pockets.
From there it is only a matter of a couple of weeks before a tender is launched to look for new suppliers. Even though the incumbent supplier may be asked to bid, it is rare that they would retain this contract. Why? Because their client does not trust them any more. In the feedback session (if they get one), the supplier will hear that they have lost the contract due to lack of "Innovation". A.k.a. you have deceived us for the last time.
So, if you are a supplier and in a relationship you want to continue with a particular organization, know that to prevent this unloved/unappreciated feeling from taking root in the minds of the Operations and Procurement people, you need to show them on a regular basis that you are the right partner for them (and vice versa - the client also needs to do this). How? By involving them in your own internal decision-making on new product development, investment, inviting them to industry events and discussions, etc. The more you get them to own the new technologies and have a hand in the business direction and Innovation that you are bringing to their organization, the more likely it is that they will trust you and realize that your cart and their horse are inextricably linked. This is easier said than done. However, if you calculate the (hard and soft) cost of losing that client/supplier you will realize that little and often involvement in your day to day by your client/supplier could prevent divorce papers from being served.
We are a Global Procurement, Supply Chain and Business Consultancy specialising in Supplier Vetting and Management, Business Analytics, Business Interpretation and Translations, Contracts Management,…
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