How To Spot Supplier Risk In Communication

CONTRIBUTION BY Ben Goldwasser – Business development professional

We’re starting a three part series on how to identify various types of supplier risk. This post kicks off the series, examining how to spot supplier risk in communication.

Communication is a critical component of any business and is no less crucial in supplier relationships. When your company has great communication with suppliers, it can be like adding another department to your organization. There are a large number of suppliers who do an excellent job communicating with their customers. You probably have several suppliers you can think of now that practice excellent communication. What is it that sets these suppliers apart? First, better communication leads to more efficient business practices. This can be seen in being able to respond to customers quickly and with thorough information. Also, suppliers that communicate well understand your company’s objectives, and how their business fits into these objectives.  As you know, when a supplier has these traits, errors related to communication issues are much less common.

Unfortunately, there are a number of suppliers that are not as transparent with their customers as they ought to be. This break down in supplier communication can introduce various risk factors into your supply chain. The question then becomes, ‘how can you spot risk in supplier communication?’

The Details Simply Don’t Align

You may have a contact you normally deal with when working with a supplier. This is the person you go to with new jobs, or when you have any questions to clear up. However, what happens when your contact provides you with inaccurate information? For example, your contact may have quoted a new job at a certain rate, but the official documentation says otherwise. Another example may be stating that a truck is in transit when the GPS tracking shows that the truck is stagnant at a truck stop.

Accidental or not, these mistakes slow down your business, cost you money, and damage that supplier’s relationship with your company. If mis-aligned details become a recurring problem, it’s probably time to find a new supplier.

Non-Responsive to Outreach

When you cannot reach your supplier, or attempt reaching them multiple times without any follow-up on their part, you should start to be wary. Does the supplier not value your business? Do they lack the man-power or technology to field incoming communications and respond accurately and promptly? More importantly, how will their delayed responses effect your company if something goes wrong during a job or you need a piece of vital information to relay back to your customer?

A delayed response could have devastating costs in situations like these. Overall, it is hard to put a lot of trust in non-responsive suppliers, as you never know when you’ll hear from them next.

Won’t Answer Direct Questions

As you know, suppliers with great communication can be relied upon time and time again as valuable components of your company. Generally, you have a detailed knowledge of these suppliers, and trust the information they provide. However, the same can’t be said for suppliers who routinely dodge difficult questions or provide you with answers that don’t get to the core of what you’re asking immediately.

Whether they aren’t actively listening during your conversations or simply don’t have the adequate industry knowledge to appropriately answer, these are major causes for concern.

Effective communication is a cornerstone of strong relationships between your company and suppliers. Such relationships, especially with strategic suppliers, are often collaborative, and both your business and your supplier’s business grow together. Conversely, poor supplier relationships present a threat to your business; however, it is possible to hedge against supplier risk. By identifying supplier risk via their communication practices, you can work to eliminate these suppliers from your business or reduce their role in your supply chain.

 

 

6 Things You Need to Know When Purchasing – Service Lifecycle Management Software

CONTRIBUTION BY Michael R. Blumberg – Certified Management Consultant (CMC) and President & CEO of Blumberg Advisory Group

We’ve spoken to hundreds of companies to find out about their experiences when purchasing enterprise software for service (also known as Service Lifecycle Management (SLM) software). We’ve distilled the knowledge we gained into 6 tips to help you when you are in the market for enterprise service software.

What to expect in the sales process?

You are likely doing research before you ever even engage a vendor, but when it’s time to start talking to software providers, what should you expect?  First of all, most vendors will give some sort of brief, high level demonstration of the software during your initial call. This typically is just meant to give you an idea of how the software works. More detailed, customized demos will follow and at this time more thorough vendors will ask you to fill out a demo prep form so they can tailor the demonstration to your needs. You may also be asked to sign a non-disclosure agreement so the vendor can freely share confidential information. Don’t expect more than a ballpark figure of the cost of the software on the first call; you’ll need to fully discuss your needs and expectations before getting more detailed pricing. This process also provides the opportunity for you and the software vendor to determine if you are the right fit for each other. Figure 1 shows the expectations of the software buyers we surveyed recently.

Figure 1