Ho, Ho, Ho – Hey Santa, what’s in the bag? Sourcing tools, SRM or a Sales and Marketing RFP?
Since it’s finally December I decided why not? Ho, ho, ho! Let’s have a holiday blog… and away we go!
So let’s talk about the main man – Mr.Claus. We know he has some pretty cheap in-house labor (those cute little elves on the shelves – DO NOT FORGET!), but it makes me wonder what he does about all of his direct material suppliers. Can you imagine if he ran out of toy parts, wrapping paper or bows?! It could literally ruin Christmas!
Therefore, Santa has to be on top of his Supplier Relationship Management (SRM) game. He has tons of time and opportunity in the offseason. But when you are a Category Manager, the day to day work can take priority. So how do you assure all your hard work to get reduced rates, rebates, business terms or even KPIs are being executed? How do you have the time for 15 QBRs (Quarterly Business Reviews) when you are running eight different RFPs and finalizing four global holding company contracts?
If you don’t have a formalized process in place, you may have a hard time prioritizing SRM to the top of the list. But it is an important part of the Category Management process. So in trying to get on the good list this year, I’ve decided to share a few ideas that I’ve picked up in the past few years to ensure I focus a portion of my time on SRM.
Contracting – This is a true gift – can you say category management life hack? For your top suppliers, create a business term for the contract that the supplier must schedule QBRs and include a financial penalty (that credits the business) if they miss one. It’s a win-win. You can outsource your work and if they forget to do it, you have a bonus for the business!
Now I’m sure some of you are saying, but what if they don’t agree to it? Well, Bah-Humbug to you! Use your imagination it’s Christmas time. There are tons of other penalties that could benefit the business or your group. And if I can get agencies to agree to pay for performance contracts were they put their revenue at risk, you surely can negotiate a small penalty!
Prioritization – Make your list and check it twice! If you don’t already have a list of preferred Commercial suppliers create one. Even if it’s only used by you. Since we know not all suppliers are created equal, make sure sit down with your business partners and review their level of spend, risk and internal priority. You’d be surprised who your business partner might view as critical despite their spend.
So if you only have a small amount of time, you’ll know which meetings to take first. Whether it’s your top five or ten it doesn’t matter, you’ll know you’ve picked the right ones. And your business partners will appreciate it too.
Block Your Calendar – Simple but useful. Set aside a day a month to focus on SRM. And every time you have an issue or problem you want to address, put it in the meeting notes so you don’t forget.
Then dedicate a week a quarter to focusing on QBRs, making time to meeting with new suppliers and having supplier days/on sites to support the business. Not to say you won’t get caught up with anything else on that day, but at least it will be top of mind.
Try to do this for 2019 and/or subsequent years – NOW. It’s always easier to find time a year plus in advance! And if you schedule subsequent years at the same time, it gets you into a pattern making it easier to remember and do. For you and your suppliers. Who doesn’t know what December 25th is?!
Last, I figured I’d write about something that encompasses the giving spirit. Relationships shouldn’t be one-sided, or they tend to fall apart. We expect a lot from our Commercial suppliers, including crazy turn around times for RFPs and projects, putting together QBRs and lots of other requests that get unrecognized. So here’s to giving back.
If you don’t have a supplier days fair or onsite-pitches that highlight their creativity, create one. I recently brought in four of our top Medical Communications suppliers to pitch capabilities that the business wasn’t currently using. To make it worth their while I included not only my Commercial team but the WWRD (Research and Development) team too.
The suppliers got the potential (and confirmed!) additional business and our business partners were consolidating their spend and gaining additional rebate credits. It was a lot of work on my part coordinating times and schedules, but it was mutually beneficial – so it was worth it!
As you can see, no matter where I was I always tried to get into the holiday spirit! Hopefully, these tips give you some insight on how you can better manage SRM and gets you in the gift giving mood. So feel free to join the spirit (can you say Ho, ho, ho!) and share some of your best tips, tricks or suggestions. I’d love to hear them all! And a Ho ho ho, to you!