Supplier Relationship Management
I’ve said it, my boss has said it, and even previous bosses and colleagues have said it. It is your business to lose (incumbents).
If you decide to not show up with your game face on, you should try to exit gracefully and tactfully. Being a whiner isn’t going to get you anywhere. I promise.
The Sourcing Profession has some leverage when it comes to SRM, so tread lightly!
My SRM Rant
What’s still shocking to me after all these years, are the suppliers who come into RFP pitches, believing they’ve already won the business. Just because they are the incumbent. (As if they would be handed millions of dollars in business – just because). *Cue facepalm.*
They put zero effort into the pitch or process. And quite frankly it shows. I haven’t seen a time where a business partner hasn’t made the complaint of how little work or effort you made (and how egotistical to think it was yours without having to fight for it). So that’s where you went wrong – you didn’t check your ego at the door.
Why Supplier ‘Relationship’ Management Matters
So let me explain something to those on the supplier side, that most have seemingly missed getting the memo on. And this isn’t just a recent event.
I’ve seen it throughout my career, and I’ve heard tales from colleagues. Yet, it still baffles me when it happens. Why? Because it’s outright stupid. (maybe that’s the reason for the book: Why smart people do dumb things).
So let’s agree that, yes, you are the incumbent. Unfortunately, no, if I’m running an RFP process, you most DEFINITELY have not won the business. Why?
First, it’s Category Management 101. Supplier relationship management is the key to reviewing and re-evaluating your performance. That’s why it’s considered to be a continuous loop. You’re always being re-evaluated when Sourcing is involved, so resting on your laurels isn’t an option.
Second, I’m not wasting MY own time or others on this extensive process to check a box. Because here’s an inside ProTip for you, my business partners choose to work with me; they aren’t mandated. And if you already had the business, we’d be in a negotiation. Not a two-month-long RFP process.
Even if it were to check the box, I’d have some professional courtesy and talk to you ahead of time if this was just a formality. The fact that I didn’t speaks for itself.
Third, if we’ve had past issues with your team, the RFP process is the last time you want to forget to follow directions or not bring your “A” game. You’re asking for a disaster.
Sourcing and the business tend to view the process as an opportunity for you to showcase what you really can do. And prove why you are the right partner and should continue to be one.
Last, the saying when it comes to SRM is real; it is your business to lose. It’s true that you have a leg up on the competition by already being onboard, contracted with, and having insights from already working with the business. But that doesn’t mean you’ve won by any means.
You should leverage those things to your advantage instead.
Oh, and for those who think their connections or relationship with an internal partner is the end all be all, it’s not. When we review suppliers’ capabilities, KPI’s, with global partners, the word can get around fast. It’s like highschool. If you have a bad reputation (especially with sourcing), you might as well switch schools.
Let’s not forget, there is always some willing to go the extra mile, not gouge us in pricing and steal your business during this process. They are hungry for the business and aren’t going to be lazy to win it.
Moral of the SRM story – recognize your RFP “Rs”
- Realize – it’s in the company’s best interests to go through this process. It can speak volumes to the personnel you have employed.
- Reckless – If you spend no time on the pitch, expect our response to have the same amount of effort.
- Recognize – if you lose the business and your priorities aren’t on why you missed it – your priorities are in the wrong place. Time to “reassess.”
- Retaliation – if you think you are going to win back the business by pointing the finger at what I did wrong, think again. You forget who the real internal FTE is, and breaking news – it’s not you. Ever.
- Relationship – SRM is “relationship management.” We aren’t here to play tiddlywinks with anyone (and sure as hell wouldn’t get paid for it if we did).
- Regrettable – mistakes, try not to make them. You burn one bridge internally, and you might as well burn them all. Short term gains can result in long term losses.
What can you do to for these issues? Rehearse pitches, resolve outstanding issues, and be relatable. Otherwise, throw the relationship in the dumpster. Especially if you decide to retaliate against someone in my position.
We are viewed as the single source for choosing the best suppliers at our company, and are looked to for suggestions for future business. So you can see why burning that bridge, may not work out in your favor.