Lessons Learned in Supplier Relationship Management - A Consultant's Experience with Chicken and Construction

By Guest Editor

December 10, 2017 at 7:44 PM

Relationship Building Handshakes chicken & construction smaller.jpgGrowing up, my favorite fast food restaurant was the Harold’s Chicken Shack on 87th and State right off the Dan Ryan Expressway in Chicago. It is still open today. (I highly recommend the half dark and mild sauce order).  While in college, I took a road trip to a neighboring school to visit a high school friend.  While walking around campus, I came upon a sign in the distance that caught my eye.  As I got closer to it, I felt as if I was Linus from the Peanut Gang walking towards the Great Pumpkin in the pumpkin patch.  Harold’s Chicken Shack WAS HERE!

I stumbled over my words as I placed my order: “Half dark mild, salt and pepper, with mild sauce on everything”.  Twenty minutes later (fast for a Harold’s), I was handed my order.  As I took my first couple of bites, my joy turned to longing. The chicken was ok.  It was not Harold’s.  Harold’s is great.  Although the décor of the restaurant and menus were the same, this was NOT Harold’s Chicken.  I tossed my half-eaten meal in the trash and never ate at that spot again.

What happened with Harold’s (that particular location is now closed) could happen to any client-supplier relationship where the customer’s expectations are not met: an end to the relationship.

Allow me to pivot to a category I love: Construction. One of my past clients had a Master Service Agreement with a national Construction Management (CM) company. After going to market for CM, they specifically selected this particular supplier due to their account management structure. For my client, a single point of contact was critical. During the RFx, the CM proved they could deliver a high degree of attention to the account that the client was seeking. As a result, for years the CM rep was highly regarded within the client’s organization – often considered an important member of the client’s category management team.

All that changed when my client’s dedicated account rep moved to another company. The CM company decided to split client management responsibilities between their East and West Coast Operations, to match their own internal structure. Soon afterwards, problems arose in the relationship. At the start of the demolition on one project at an east coast location, the CM discovered previously unknown asbestos.  The CM immediately contacted my client and asked which Abatement Contractors they should use for the site.  

On construction projects, unforeseen conditions like this happens often. This is no big deal, right?   Wrong. 

When similar issues in other regions occurred in the past, the CM would take the lead in getting an Abatement Contractor selected and on site.  The client was simply updated daily on the cleanup’s progress, and the CM proactively worked will all parties to adjust the project schedule to ensure the construction delays were eliminated or kept to a minimum.

Needless to say, similar actions did not take place for this project. When my client shared how the CM had managed this type of issue at previously locations, the CM pushed back, choosing not to move forward until the client provided the name of the company they should with. There were underlying reasons why the CM took this stance, however, it was only after several escalations and three weeks of lost time that abatement started. 

Could this have been avoided? Yes. How? By the client having a strong supplier relationship management program. When expectations are clearly shared beforehand, they are easier to realize. Often times in client/ supplier relationships, especially in long-term ones, assumptions are made.  And, you know what they say about assumptions. They can severely damage client-supplier relationships. For this particular relationship, there are a number of ways the added disruption to the project could have been avoided, including:

-          Maintaining the established account management structure

-          Properly retaining and sharing how issues have been resolved in the past

-          Adequately communicating the changes to the account management structure and soliciting client feedback

To get to the moral of the story: Set your supplier relationships up for success by taking a structured approach to your relationship; from the beginning to the end.

At a glance, remember to:

  • Set realistic expectations (measureable KPI’s) between both parties. 
  • Establish frequent communication touchpoints.
  • Develop scorecards to measure performance
  • Review services failures to see what the root cause for the failure were, and make corrective actions to reduce the possibility of reoccurrence.

Whether establishing a new relationship or maintaining a long-standing relationship with an incumbent supplier, don’t wait until a bump in the road occurs to set your relationship expectations. Proactivity is key for business continuity.

 

About the Author:

Vernon Griffin is a Senior Consultant at Source One Management Services. Griffin helps companies establish drive further value out of supplier relationships in the form of supplier-introduced innovation, process improvement, and cost savings. In addition to his Supplier Diversity expertise, Griffin possesses significant strategic sourcing experience in a wide range of indirect spend categories. Throughout his nearly two decades as a procurement professional, Griffin has helped companies reduce costs, improve category management strategies, and enhance supplier relationships. In 2010, he was named DiversityBusiness.com’s Champion of Diversity and was recognized in 2017 by Minority Business News as a Corporate Buyer of the Year.      



Tags: Supplier relationship management Supplier management procurement relationship management supplier expectations
Category: News Article

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