Seasoned industry veterans with extensive experience in senior procurement and supply chain jobs have shared their insights into what to do when a long-term partner in the supply chain fails to hold up their side of the deal.
A recent ‘Negotiation Roundtable’, organised by negotiation experts Conti Advanced Business Learning (CABL), provided some practical insights for budding supply chain practitioners. The founder of CABL, Giuseppe Conti, emphasised that one of the biggest risks to long-term relationships can arise when one or more parties suddenly decide to take advantage of the situation. For example, one of your clients might abruptly hike their prices when you thought you had a long-term agreement over costs, which may have been why you engaged them in the first place.
Honeywell’s Sourcing Leader, Xinjian Carlier Fu, advises professionals in supply chain jobs to look beneath the surface at issues like risk reduction, security and safeguarding margins. Being clear about these will help procurement departments to be in a stronger position for negotiations.
There are also tense scenarios for recruits just starting new procurement jobs when they inherit a tricky supplier. Ifti Ahmed of Titanium Partners has a straightforward message: do your research. Be clear about what the supplier valued in the original agreement, what annoys them and what they want from the partnership. This opens reasoned discussion over improvements for both sides and paves the way for a win-win outcome.
Conti also believes that supplier relationship management can also be enhanced with the regular use of partnership tools, including performance reviews, Service Level Agreements with clear KPIs for each party, bonus systems, audits and 360-degree feedback.
Supplier relationships aren’t one-off events cemented in a single agreement – they’re long-term partnerships that need to be regularly tended to.
Finally, for new partnership negotiations, Francesco Lucchetta, Director EMEAI Supply at Pentair, emphasises the likeability factor: “People are very different and to work with people you like is a really good thing. When the culture is unfriendly it’s hard to build trust in the relationship.”
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