Posted on

Remember to tell your supply chain that you are engaged with them.

Read any paper or article on supply chain management and one key factor returns time after time :

How engaged you are with your supply chain?

Let’s look at Best Practise

This is our summary of best practise in the industry: The idea is a very simple one; in order to get the best out of your supplier to move as close to the bottom right on this matrix; green and green!

Supplier Engagement Best Practise diagram
Supplier engagement matrix. Get to the bottom right!

We have not read an academic study that disagrees with the concept and research bodies such as Gallup Supplier Engagement concludes that there are real benefits to be had where engagement is proactively driven, including;

  • Higher quality
  • Improved forecasting and planning
  • Improved product development
  • Greater supplier support
  • Lower costs – both transactional and price per piece overall

We are all agreed then – we follow best practise!

Seeing as we have this unanimously agreed, clearly every supply chain function follows these engagement guidelines!

Well, not quite.

Here are 3 factors that stand in our way:

1.Resource

It takes considerable effort and time to proactively drive engagement and dependant on the size of the supply chain function it will certainly never be practical to adopt this for all suppliers. The hard bit is to identify which one(s) are “worth” the effort – either through volume of orders, strategic importance, or quite frankly how well you get on with the supplier. So engagement happens in pockets with isolated suppliers.

2.Too few gains

As with all theoretical models, real life will always throw in a few curve-balls that break the consensus. In the past we have worked with suppliers who deliver a great product at a great price which completely fitted our business. Processes were automated, human intervention rare and issues numbers were through the floor. Simply put, it just didn’t seem we could do much more to drive performance and certainly the effort we would put in was never going to materialise in corresponding benefits.

3.Convinced they are already doing it

Someone from a supply chain function might look at the top left tangent and immediately think along the lines of “we may not be world class but at least we are better than that”. We’ve worked with supply chain managers and consultants from different sectors who on the question of engagement are all convinced that whilst there is always room for improvement, they ARE engaged with their supply chain.

But we do measure engagement!

The biggest challenge we would have to this is to understand how this engagement is measured; nine times out of ten it is by the criteria of the buyer, NOT the supplier. In other words it’s a one dimensional assessment which does nothing to further any engagement or relationship.

…and we do communicate!

Supply teams have argued that there is frequent exchanging of information, Management Information and service levels met, but these feel more of a contractual requirement and any meeting to discuss these WILL progress the relationship but by increments not leaps and bounds.

An easy first step to enlightenment

Tell your suppliers you want to engage better with them.

You might be trying, but they won’t notice unless you talk to them.

Discuss, together, how you might do this to best effect for both parties.

In an ideal world – bake it in from the start:

We’ve seen first hand companies and their strategic supplier launch joint ventures in a new territory with a board member from either side join the others board. This ensures that strategy, ambition and delivery was jointly conceived and the benefits (and profits) gained were shared equally.

Aspirational? Certainly. Always achievable? Certainly not.

But getting as close to this ideal as suits your company in terms of outlook, structure and resource is well worth the effort.

Don’t necessarily ask yourself what the cost benefits will be for this effort, rather what the price of not engaging might be.

Posted on

Supplier Management; A change of perspective

Supplier Management is a tricky business; you often have a complex array of commodities or services being provided by an selection of different companies.

And just to make life just that little bit more difficult, it’s rare that each supplier acts in isolation. More often than not a part of what one supplier delivers (or not!) will directly impact a part of what another supplier delivers and the knock-on goes down the chain.

In a service delivery environment these impacts or difficulties can be exaggerated because any process in place won’t follow a nice linear manufacturer line but has the variable of a customer and choice to accommodate.

What works well – managing by commodity

What we have seen in a diverse service related supply chain is that Subject Matter Experts (SMEs) control the suppliers and therefore the commodity in isolation. There is a lot of sense behind this as the SME understands;

  • The market place
  • The commodity
  • What good looks like

The end result is often that each supplier or commodity is generally well managed and the three key pillars of measurement (cost, time and quality) are where they need to be or within an acceptable tolerance. The “horizontal” management which is most common place certainly has merit.

What about the vertical?
What about the vertical?

What does not work quite so well – the wider view

However, the business in which the supply chain fits is rarely run on commodity lines; there is a wider strategy, vision and set of goals which the supply chain will contribute towards.

Let’s take a theoretical example. The board of your company has received consistent feedback that whilst their offering is considered to be at a good price point, customer complaints are escalating and the service rating has never been lower. Strategic change has been required therefore to improve quality across all areas and it is accepted that this might have a small cost increase. Because the business has been slow to effect change in the past, there is now a big pressure push from the top to see action.

As Head of Supplier Management you gather your team to explain the revised focus.

  • You review the complete supply chain metrics looking specifically at the service performance
  • Each supplier has been consistently outside target, but only by a relatively small margin
  • In isolation and viewed in a silo of single supplier activity this service drift was noted but not deemed worthy of a bigger set of actions
  • As a combination though, the service failure looms a lot larger

Next actions look something like this

  • Each SME is now tasked on service over cost
  • Each will pull a set of meetings to relay this to each supplier they deal with
  • Each will tell you why something can be done but maybe not as you outlined because of “unique conditions to my commodity”
  • Some will increase prices and ask for a service improvement with very marginal improvements

And so on, and so on.

How to include a wider and future focussed perspective

So in addition to managing by commodity it is as important to view the complete supply chain output through the same measures and lens as that of the wider business.

Also it’s worth thinking more about HOW the supply chain is measured.

Performance targets and Management Information (MI) are vital barometers of how the supply chain is or was fairing; with as long as a month’s delay in receiving MI it is often a snapshot of the past. By reviewing the supply chain output as a future focussed risk assessment proactive measures or at least plans of actions can be formed at a far earlier stage.

Any templates that could do this for me?

Are there any templates that can do this for me?

This Supplier Dashboard and Log does a great job – it is tried and tested!

Supplier Risk and Performance Dashboard Template (POCCET)
Supplier Risk and Performance Dashboard Template (POCCET)
Posted on

How to effectively compare companies, products, services or even people.

Let’s consider the picture above for a brief moment. We know that each vehicle here is going to be a different make, model, specification and colour, but from our initial view point all we can see is a very similar array of vehicles. Asked to chose the best one for any particular purpose (other than maybe size), we are going to have to use guess work and it will be a lot more luck than judgement if we get it right.

The snow which so confuses the issue here is like a marketing campaign or a very good sales person; unless you get beneath the outer layer, you can only judge on what you see. We tend to view this as an issue in the world of procurement from a sense of buying poor goods or services from a very good sales force, but over the years we have found that increasingly it can translate as missing a superb offering because of an inexperienced way of selling.

Running full blown RFI’s will always get to the core of an offering and on a large spend or critical piece of outsourcing this has to be the way forward unless you have an intimate market knowledge. If you don’t and it’s a crowded market, the question is how do you devise your short-list first? For every tender you issue, someone is going to have to score it, and if you really want to be focussing your energies on evaluating the cream rather than working through the, well, not so creamy.

To that end, we at BDUK have always employed a short-listing comparison tool to whittle down the market to a more suitable and manageable number of companies to then approach.

Not only does this make our life’s simpler, but we have learnt the hard way that to run a short-list tender with the short-list leaves us wide open when a friend of the board has a company doing exactly what we are buying and we not only did not include them, but have nothing in the way of justification as to why.

Self preservation. It should be our company motto.

Posted on

Running a Website Tender – RFI, RFP, ITT

Have you run a website tender before? If not, here are some pointers to help. (NB – this is only for sub-OJEU level tenders – less than ~£140k [see OJEC]).

For sub £15k projects, you should find the supplier you like, and award the contract directly. For those between £15k and £100k, you should include 3-6 suppliers in a tender process.

Use reliable templates for your tender documents

We have a set of tried and tested website design tender templates here, which will help you through the process.

What is your website project? Define it!

Be sure your project is well defined – the features you want, target platforms (mobile, web,..), a design brief, start date, delivery date, guide budget, and include any support you are likely to need during the process.

Find some suitable suppliers…

Put together a list of 3rd party suppliers who are suitable. If you do not know any, you can find help from e.g. Business Link.

If you have too many, you can narrow the list down by using an RFI to screen for suitable suppliers – this is a document with a set of questions which probe whether suppliers could deliver your project to your satisfaction.

Send out a Website RFP (request for proposal)

Using an RFP template, send out your “Request for Proposal”. You then allow the group of suppliers to work on this proposal for at least a couple of weeks

Select your supplier, fairly

You will need to conduct a fair evaluation of each proposal, with scores, to assist you in making a fair and documented decision. Use a pre-agreed set of criteria (which should be lined up with the requirements you put in your RFP) to mark each supplier’s proposal. You should do this with at least 1 other person, so that you have another point of view, and so that you can mitigate any ommissions you may have made.

Website design tender template pack - RFI, RFP, ITT
The Website Design Tender template pack

Website Tender Templates

You can find a set of website design tender templates here – this includes RFI, RFP and Evaluation templates. If you need help with these, please contact us.

Posted on

How to run a Website Design Tender

Step-by-step Website Design Tender template: provides a formal invitation to tender & supplier selection approach, covering ITT, RFI, RFP.

Need to find a supplier to design and build your website?  How do you ensure that you get enough information up front to make the best choice?

Website design tender template pack - RFI, RFP, ITT

We’ve recently created a website design tender template pack to take the complication out of the process with a simple explanation for all of the acronyms.

ITT, RFI, RFP?

What is an ITT (invitation to tender)? What is an RFI (request for information)? What is an RFP (request for proposal)?  The request for information and request for proposal templates set out all of the questions you need to ask a website agency or freelancer which you can tailor to suit your requirements.

When you’ve finally got a selection of interested parties, all ready to show off their prices and skills, how do you decide?  This is when an evaluation criteria template will come in handy – these are professional prompts to guide you to the best and fairest choice.

Download the Website Design Tender Template pack here.