Tuesday 8 November 2016

Supplier Selection and the US Presidential Selection

Suppliers are selected by people in organisations every day. Some suppliers meet expectations, and others don't. Some suppliers even go on to exceed initial expectations.

That said, the impact to the organisation of these three potential outcomes depends on the goods or services being purchased. Many may moan for example about a late delivery of a pen, but it's never going to be as important or potentially as fatal as a late delivery of an epipen.

Buyers in organisations are making these assessments every day, and I wondered what organisations could learn about supplier selection from the current presidential selection in the US.

Know what you want - what’s important to you – not subjectively but objectively, and certainly in writing. After all, many in the recent brexit vote were quoted as saying afterwards “that's not what I thought I was saying yes to”. The same can be said for buying goods and services too. This Pinterest board shows the cost of getting procurement wrong (i.e. the horror stories) – the unintended consequences of not paying enough attention to what they did want. I also wrote a blog on getting your business requirements right.

Identify which are go/no go criteria. That is, identify the needs that would mean a supplier gets deselected. The earlier in the process the better to save wasted time, and potentially the exclusion of more appropriate suppliers who are able to meet and even exceed your needs and wants.

Weight your requirements. Which requirements are more important than others. It's no use getting caught up in a requirement that only contributes 0.005 % of the decision, and ignore requirements that deliver 30% of what’s important to you.

Assess how the suppliers meet these needs and wants objectively – using an excel spreadsheet if needed. Is this supplier 5/10 compared to another at 6/10 for a requirement. That might not seem such a big difference, but when used against a number of weighted requirements it will provide valuable information on which supplier is best able to meet your requirements.

Don't make your requirements so restrictive that they only allow for the mainstream suppliers. Consideration of more inclusive, diverse and open criteria may encourage smaller, and yet equally capable candidates, sorry suppliers, to participate.

Do appropriate research and analysis of the market to understand who all the potential suppliers could be, and encourage them to engage with you. After all you might not get what you want if you allow the suppliers to self select, or only include suppliers your MD wants you to consider.

Check the efficacy of the information you're being provided. You may be very surprised with the outcome if you believe everything you're told by the supplier, or fail to understand that your selection has been heavily impacted by a big marketing budget rather than detailed analysis of the data. You only have to watch this Darren Brown video to get a sense of the possible with respect to the unconscious messages we’re subjected to.

Check the reason a supplier wishes to dish the dirt on another supplier rather than focus on what they can deliver. 

Don't get too bogged down in the bureaucracy – if it doesn't feel right to reduce the shortlist so early - don't. A flexible process allows you to keep your options open as you explore the ability of the suppliers to meet your needs.

Don't just follow the crowd – just because everyone else seems to be buying the new technology doesn't mean it aligns with your organisational mission, culture and values

Ensure the contract terms clearly identify what breach looks like (for both sides) so that you're not stuck with an inadequate and failing supplier for the next 4 years (or life time if we use the recent Brexit vote). You may also want to make it clear in the contract what the ramifications are of them making statements that you use to select them, that later prove to be false.

There's many differences between Politics and Procurement but, as with any metaphor, sometimes we can learn more about how to get it right in one area by looking at the insights from another totally unrelated area. You may even have noticed that the use of metaphor meant you were more engaged with the procurement process, in a way that you might not have been without the metaphor :-). Although I more normally use gardening as a metaphor for supplier selection and management.

How can you apply your assessment of the US presidential elections to an aspect of your life to ensure you keep on track rather than go off the rails! 

Alison Smith
The Purchasing Coach
Inspiring change inside and out

Follow hypertext links in the text to other blogs I've written on that subject. 

More on the services I provide can be found here.

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