Effective Supplier Relationship Management
Context
When I joined the business, my first priority was to stabilise our critical food supply.
Supply was bumpy. The supplier was constantly criticised for being unreliable and product availability was inconsistent.
I appraised the issues objectively and factually and identified both parties were creating issues, the contract wasn’t proactively managed and immediate improvements could be feasible through improved Supplier Relationship Management.
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Approach
I got to work quickly and deployed the following action plan:
Appointed a new procurement manager with strong soft skills to boost stakeholder and supplier engagement.
Launched a Invitation to Tender supported by 3rd party consultants who could do the heavy lifting at speed on our behalf.
Objectively assessed all proposals and identified the incumbent as preferred supplier due to more attractive commercials and despite operational frustrations there was a lack of appetite to undertake major change.
Negotiated a new improved contract and communicated a clear message to both businesses that this was the start of a new era.
Results
£3m saving negotiated into the new contract.
Robust contract with:
•clear obligations for both parties
•clearly defined and measurable KPIs with financial consequences for service failures
•more flexibility to source upstream and introduce bespoke products
Improved forecasting of volumes and closer accountability with bespoke manufacturers
Regular MI reports and reviews to track performance and resolve issues early
Open and honest dialogue at senior level to identify emerging issues and share insight on market trends
Huge step change in performance to >98% delivered service levels
Through effective Supplier Relationship Management we created a culture of trust, collaboration, and partnership.