Does Procurement Pundit Advice Have A “Shelf Life?” Unravelling the Supplier Relationship Mystery

Posted on November 14, 2022


“I have found no greater satisfaction than achieving success through honest dealing and strict adherence to the view that, for you to gain, those you deal with should also gain as well.” – Alan Greenspan, Chairman of the Federal Reserve Board

“If we are together, nothing is impossible. If we are divided, all will fail.” – Winston Churchill

The above two quotes are from an article written by John Yuva, now the Director of Research Operations with Ardent Partners. Can you guess the year he wrote the article? We will get to that later.

Right now, enter the phrase “importance of supplier relationship management” in your Google search engine.

When I did the search, the links to a copious number of articles and eBooks came up on the screen. One example was an eBook about “Procurements New Era – the 2022 Procurement eBook,” which stated, “In order to navigate today’s challenging financial environment, greater collaboration is vital between departments, buyers and suppliers, and across the supply chain.”

Who could argue or disagree with this sentiment? After all, it is just common sense, or as stressed in one of the eBook’s headings, “collaboration enables resilience,” and resilience is one of the current industry hot topics.

So, what is the real point of this post beyond stating the obvious through various quotes and references?

The Hallmark of Good Advice

When someone offers you advice, what makes it good?

Good advice goes beyond acknowledging its merits and relevancy to include taking meaningful action. In other words, hearing advice and acting on it is the true measurement of its “sustaining” impact and value.

When it comes to the Procurements New Era eBook – which is a good read, the only question I have is whether it will be acted on and finally “stick” in 2022.

“The way we work with suppliers has to change.” – Dr Elouise Epstein, The Voice of the Supplier Survey (2022)

The reason for my apparent skepticism has nothing to do with the advice itself but with the fact that in 2022 we are still talking about “having to change” the way we work with suppliers.

Remember the John Yuva article? That was published in 2005. Was it good advice, then? Was meaningful action taken? Not according to the recent 2022 Voice of Supplier Survey.

Here are a few eye-opening results from that survey:

  • When thinking of their most important customers, 61% of suppliers say, “We find it challenging to do our best work for this customer.”
  • The survey revealed that suppliers must login to an average of 8.4 systems in order to serve their most important customers. Meanwhile, 38% of suppliers state that they have to login to 10 or more systems.
  • 60% of suppliers in our survey stated they spend too much time on administrative tasks for their most important customers.
  • Almost half (47%) of respondents in the Suppliers’ Perspective Survey said that they find it difficult to resolve queries with their most important customers.

The same survey makes an interesting observation when it suggests there is “a whole marriage to come” with suppliers beyond getting a contract in place, approved, and uploaded with all the right certificates in place. Included in this “marriage” are suppliers’ concerns regarding “Have I got a purchase order? Has the purchase order come in? Where do I send the invoice? How do I get paid? Who do I phone to chase up?” For suppliers, the timely payment issue is still a big one.

Taking It Off the Shelf

Citing a Gartner survey, a February 2021 Supply Chain Dive article suggests that the industry is finally taking the idea or concept of strong supplier relationships off the shelf and dusting it off. Apparently, 77% of companies are now investing in making “deeper supplier relationships for resilience” a reality.

But will “said commitments” stick, or will we look back seventeen years from now at 2022’s sound advice from industry pundits like we are looking back at the 2005 Yuva article today? Only time will tell.

In the meantime, I will leave you to ponder the following quote from the eBook that is available through the Sourcing Industry Group website:

“I believe that there’s an opportunity to fundamentally change what procurement does for the business. [BSM] is fundamental to this because it gives us an opportunity to direct spend to preferred suppliers—suppliers that we consider our business partners, that we consider having true value-added relationships with. — Al Williams, Chief Procurement Officer, Barclays (2022 eBook)

(NOTE: Here is the link to a panel discussion I moderated in which we delved deeper into the Supplier Survey – Negotiating Your Success: Do Your Suppliers Finally Have a Voice?)

Posted in: Commentary