Supplier Relationships
Develop supplier engagement appropriate to supplier classification and foster long-term strategic relationships with preferred suppliers.
Improvement Planning
Practices-Outcomes-Metrics (POM)
Representative POMs are described for Supplier Relationships at each level of maturity.
- 1Initial
- Practice
- Best endeavours of available personnel.
- 2Basic
- Practice
- Define supplier engagement strategy based on achieving on-time delivery at the lowest possible price.
- Outcome
- There is competitive pricing and improved product/service availability but the low price focus may impact adversely on quality.
- Metric
- % of engagements managed vs price% engagements managed vs delivery% engagements managed vs qualityhistorical analysis: price, availability, quality
- Practices
- Define the IT supplier engagement model.
- Criteria may include: contact points, escalation procedures, the frequency of operational and strategic planning and review meetings, and a description of roles and responsibilities.
- Outcome
- In some cases interactions are efficient, and problems and conflicts can be resolved.
- Metric
- % of supplier relationships managed using the defined IT supplier engagement model
- 3Intermediate
- Practice
- Define supplier engagement strategy emphasising focus on quality (as well as price and availability).
- Outcomes
- There is a heightened focus on quality across all interactions with IT suppliers.
- Improvements in quality of product/services occur.
- Metric
- % of engagements managed vs quality, historical analysis: quality of product/services
- Practice
- Assign a relationship manager or supplier account manager to preferred (Tier 1) suppliers, ensuring mutual understanding, appreciation and respect of organizational cultural differences.
- Outcomes
- There is greater potential for idea-sharing, and a reduction in information bottlenecks.
- Issues can be understood increasingly from the supplier's point of view, while communicating the procuring organization's own requirements and priorities.
- Metric
- % of preferred (Tier 1) suppliers for whom relationship managers or supplier account managers have been assigned # of major incidents with suppliers
- 4Advanced
- Practice
- Define supplier engagement strategy to focus on encouraging knowledge sharing and collaboration.
- Outcome
- There is improved alignment and cooperation between IT, the rest of the business and IT suppliers.
- Metric
- % of engagements managed vs knowledge sharing #Tri-partite meetings
- Practice
- Collate relationship management feedback across the supplier base from all sources — invite Tier 1 suppliers to perform a 360 degree review; review alignment of objectives; incentivising high supplier participation.
- Outcome
- The supplier base can be managed holistically, rather than in silos, so that recurring issues can be dealt with efficiently.
- Metric
- Percentage of suppliers for whom relationship management feedback is collated centrally
- 5Optimized
- Practice
- Define supplier engagement strategy to focus on enabling collaboration across supply chain/ecosystem.
- Outcome
- Joint initiatives, supporting the organization, exist between suppliers in the supply chain/ecosystem.
- Metric
- # of joint initiatives involving multiple suppliers
- Practice
- Regularly benchmark supplier relationship management practices and performance by comparing with peer organizations.
- Outcome
- The ability to identify opportunities for improvement is enhanced.
- Metric
- # of relationship management practices benchmarked