If You Let Your Supplier Rip You Off …

Then whatever else they do to you, blame yourself!

Not long ago, over on Spend Matters UK, the public defender penned a post on Public Sector Project Failures, Blame the Suppliers! which, while likely deserving of some vile for having the audacity to continue to overcharge the public coffers for the products and services they deliver (something they likely wouldn’t get away with if it was a big private sector client which was a leader in strategic sourcing and supplier management), is not, in the doctor‘s view, deserving of all the vile. After all, as we penned here not that long ago in our post on whether or not your suppliers are ripping you off, if you are letting them, then they are.

But that’s not all they are doing if you let them. What else you ask? We’ll get to that, but first, let’s step back.

If you flip over to the public defender‘s post, he mentions an article by Allan Watton of Best Practice Group discusses what an organization can do if a provider exhibits problems that impacts the service to your recommendation. And this is the crux of it. If they are willing to rip you off, and you are willing to let them, then if their quality slides, they are likely also willing to send you (more) inferior/defective products, let their service commitments slip (in favour of another customer if resources are thinner than they guaranteed), and even fail to enforce necessary social responsibility and sustainability requirements that they agreed to (that will get you, and not them, thrown into boiling hot water if not adhered to).

And, frankly, as far as Si is concerned, if this happens, if you are not watching them and working with (or, if necessary, replacing) them, then it is all your fault and you only have yourself to blame. Yes, they are deserving of vile for being such scumbags in the first place if they do any of this, but it’s your supply chain delivering your product to your customers, so it’s your responsibility to monitor and if anything happens, as per legislations being introduced around the globe, unless you took reasonable measures to monitor, it’s your fault. So the ultimate blame rests with you.

But, as the public defender points out, sometimes monitoring and managing won’t be enough. Often time the suppliers, while a little bad, aren’t truly rotten and can be improved with monitoring and management, but sometimes you truly do have a truly rotten apple that you can’t do anything with. In this case, you will need to switch, and to do that quickly and effectively, with as little disruption as possible, you will need a disaster recovery plan, an extreme mitigation plan where you are not dealing with a temporary disruption due to weather, equipment failure, etc. but the need to replace an entire supplier permanently. And that’s why risk management is discussed regularly on this blog, because it does no good to identify millions of savings with optimization and analytics only to lose it because you weren’t prepared for that eventual black-swan mega-disruption that is coming your way!

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