Managing and Developing Supplier Relationships
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Scott Leydin discusses best practices for managing supplier relationships. Key success factors include having logisticians with strong supplier management skills, clearly defined performance measures, and a disciplined supplier management process. Common pitfalls are poorly defined scopes of work, unclear service level expectations, and inadequate knowledge transfer. Relationship management techniques include frequent performance monitoring and strategic initiative reviews. Developing relationships requires mutually beneficial outcomes, open communication, and respect for supplier expertise. A case study demonstrates how enhancing a reverse logistics process through stakeholder meetings and redefining measures improved customer experience and reduced costs.
Managing and Developing Supplier Relationships
- 1. Stream: Title: Presented by: Best practice and strategic planing Managing and developing supplier relationships Scott Leydin Manager Global Logistics Program Management Office Hewlett Packard
- 2. Scott Leydin Managing and developing supplier relationships Agenda • Introduction • Key success factors • Common pitfalls • Management techniques • Developing relationships • Case study – beyond return • Questions
- 3. Scott Leydin Managing and developing supplier relationships Introduction • Evolution – All done in house (insource) – Outsource • 3PL • LLP (Lead Logistics Provider) • 4PL • Who is 1PL, 2PL and is 5PL next? • Basic principles • Customer experience must remain the same or be enhanced • Cost benefit to the organisation (total cost)
- 4. Scott Leydin Managing and developing supplier relationships Key success factors • Logisticians with strong supplier management skills • Clearly defined performance measures • Disciplined supplier management process • Thorough understanding of the customers business • Willingness to challenge the validity of the customers strategies
- 5. Scott Leydin Managing and developing supplier relationships Common pitfalls • Poorly defined scope of work / tender • Unclear service level expectations • Insufficient attention to contract formation • Inadequate transfer of knowledge and transition planning • Relationship fatigue
- 6. Scott Leydin Managing and developing supplier relationships Management techniques What gets measured gets done What gets rewarded counts What gets done gets rewarded What counts gets measured
- 7. Scott Leydin Managing and developing supplier relationships Management techniques • Daily feedback report – verbal and written • Weekly key performance monitoring and operational reporting • Bi – weekly key task monitoring • Monthly key performance monitoring and operational reporting • Quarterly strategic initiative reviews
- 8. Scott Leydin Managing and developing supplier relationships Developing relationships • Must have – Mutually beneficial outcomes – Open and honest communication – Multiple relationships within the organisation – Dedicated non-ops management – Respect for the expertise of the supplier – Early involvement in strategic initiatives and problem resolution
- 9. Scott Leydin Managing and developing supplier relationships Developing relationships Control Cost Process Collaborate Strategy Solutions
- 10. Scott Leydin Managing and developing supplier relationships Case study – beyond return • Problem definition – Reverse logistics process not meeting customer expectations – Average turn around time of 4.5 weeks • Impact – Negative customer experience – Financial loss due to inventory write down / write off
- 11. Scott Leydin Managing and developing supplier relationships Case study – beyond return • Resolution process – Stakeholder meeting – Validate and re-document process – Agree on realistic turn around time expectations • Identified causes – Lack of focus on performing the process – Little understanding of process interdependencies – Inadequate process measures – Policies not being enforced – Supplier not escalating customer contribution to the cause
- 12. Scott Leydin Managing and developing supplier relationships Case study – beyond return • Result – Turn around time reduced to 10 days – Customer experience enhanced – Process measures re-defined and additional measures included – Reduction in obsolete inventory write downs / write offs – New support processes introduced
- 13. Scott Leydin Managing and developing supplier relationships Key points • People with the right skill sets • Clearly defined expectations • Disciplined management processes • Leverage the suppliers expertise
- 14. Stream: Title: Presented by: Best practice and strategic planing Managing and developing supplier relationships Scott Leydin Manager Global Logistics Program Management Office Hewlett Packard