Daily Archives: February 21, 2011

Enlisting Suppliers to Create Competitive Advantage

Today’s guest post is from Robert A. Rudzki, President of Greybeard Advisors LLC, who has (co-) authored a number of acclaimed business books, including Beat the Odds: Avoid Corporate Death and Build a Resilient Enterprise, On-Demand Supply Management, and the supply management best seller Straight to the Bottom Line.

Feedback is a familiar term to most people, and its principles can be found in many aspects of business. For example, some supply management departments regularly request “feedback” from their internal clients as well as from their supply base. Sometimes this is done formally, with a predetermined list of questions about performance in the past year; sometimes it is done informally. Asking the right questions, and acting upon the feedback, are important elements of improving your performance.

A complementary concept is “feed-forward.” Feed-forward, as opposed to feedback, is a proactive approach. Based on its origins in the technical world, feed-forward watches for and monitors changes in the environment, as a way to anticipate process changes that may be required in order to maintain a desired level of performance. From a business application perspective, it tends to focus on a desired future state, and identifying ideas to help create that future state.

Next-level organizations are interested in both feedback and feedforward insights as one avenue to creating competitive advantage. One way to accomplish this is through a carefully-constructed and executed “Supplier Satisfaction Survey.” Interested to learn more? Take Greybeard’s Supplier Satisfaction Survey.

Could Word Smarts Get You That New Supply Management System Sooner?

You’re an ambitious Supply Management Professional who wants to do the best job you can. (That’s why you read SI everyday.) However, it’s tough to be the best when you don’t have the best tools at your disposal, as it limits your productivity and savings potential. You know you need that new system (be it spend analysis, decision optimization, or next generation supplier information management) and the sooner you get it, the better you’ll do.

However, you know that the company still has tighter reins on spending that are tighter than a prairie dog’s butt in a dust bowl. You need to get around them. Your boss has to want to buy that new system if you have any hope of getting it. How are you going to make that happen?

Ask smart. As per this recent post in the Harvard Business Review on why it’s better to be smart and wrong than just silent, if you ask smart, even if you’re wrong, you impress your boss and make it easier for her to help you. Similarly, if you ask for a new supply management system smartly, it will be easier for the boss to agree with you and fight your case.

Which is more likely to get the boss’ support?

I’ve been doing my homework and I think our best chance of hitting that 15% savings target is to identify the categories with the biggest savings potential, not the categories we spend the most on. We’ve been hitting those hard for the past two years and I don’t think there are much savings to be had in them at this point. If we procured a modern spend analysis system, we could quickly rank our categories by total spend and then compare the prices to index prices for the categories using these indexes I’ve identified. A single report would identify our most likely opportunities. Furthermore, we could use the tool to compare our purchase order totals to invoice totals at the end of every quarter and make sure the supplier isn’t overcharging us. And that’s just the beginning of what we’ll be able to do.


I don’t know how we’re going to save 15%. Maybe we should buy some consulting services from Supply Management Vendor XYZ and then buy whatever new-fangled tool they recommend.

I don’t know about you, but I think one way is superior.

And if you can spin it in a way that will let your boss take all the credit, then you’ll probably double your chances of success.

What do you think? Can you apply psychology to this situation or not?