The Missing Key to Supplier Performance in most SRM Initiatives


That’s right, trust. Specifically, trust in the supplier. Now it’s not always possible, but if the supplier is providing a strategic product or service, shouldn’t you be able to trust the supplier? If you have to monitor each and everything the supplier does, is that really a desirable situation?

And if you have a supplier that is trustworthy, you might find that less monitoring improves results, as the supplier wants to demonstrate that your faith in them is well deserved. (Furthermore, the supplier will have more time to focus on their work if you aren’t nagging them for an update every five minutes). As proof, consider this recent tidbit buried about 2/3rds of the way into this recent article in the CPO Agenda on When do we get to SRM?

One contract, for example, was managed by more than one full-time officer but this was adding no value. We decided it wasn’t a strategic supplier and the contract would have performed automatically anyway. So we took away the dedicated officer with no detriment to the service. In fact, it resulted in the supplier feeling more trusted.”

Now I’m not saying you shouldn’t monitor contracts and results, but that it should be done in moderation and that the best scenario is one where monitoring is automated and you only need to get involved when early warning indicators indicate that there may be a problem. You want to be spending your time building a better product or service for the end customer, not wasting it double checking every little thing your supplier does … because, in that case, you might as well be doing the work yourself!

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