Thursday, July 24, 2008

Gauging A Supplier's Commitment To Partnership

Yesterday, I posted about two seemingly polar opposite approaches to supplier collaboration. I particularly pointed out one CPO's method of gauging suppliers' interest in partnering by including his quote from a recent Supply Management magazine article in which he said, "You have to see it in the way that people respond to your pushes, challenges, and demands."

I often say that the real relationship between a buyer and seller begins during the first negotiation. And you can often gauge a supplier's interest in partnership during that first negotiation as well, many times without "pushes, challenges, and demands."

When working with a new supplier and talking through decisions that need to be made, I always like to ask the question "What would you decide/do if you were me?"

Of course, I usually know at that time what decision I will make or what action I will take. But I love to see how the supplier responds.

Suppliers are rarely prepared for this question. So their responses are usually very revealing and unscripted.

If the supplier responds in a way that recommends a decision that is clearly and heavily skewed towards their best interests and doesn't consider your best interests, then you know that you're not speaking with someone committed to a partnership.

In most negotiation cases, showing how smart you are gives you leverage. However, using a question like this and "playing dumb" once in a while can really expose you to the inner workings of a supplier's mind.

A selfish response doesn't necessarily mean that I will walk away from that supplier. But I will know whether I am entering into a transactional relationship or a partnership.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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