Don’t ignore your suppliers or these 5 Worst Practices of Supplier Management

The worst thing you can do is to ignore your suppliers.

Supplier management isn’t just a way to ensure that you’re getting the best prices and services; it’s also a way to make sure that you’re working with good people who want to do right by their customers. With the right technology in place, it’s easier than ever to manage supplier relationships.

But if you’re not careful, bad habits will creep up and ruin even the most robust procurement process if we ignore ongoing post-award contracts and supplier management.

Here are five of the most common mistakes made when managing suppliers:

#1 Ignoring Your Suppliers

Firstly, let’s address the elephant in the room: are suppliers even being managed at all? There’s still a lot of organisations who leave supplier management to the stakeholder concerned, and don’t have a dedicated team or resource overseeing the process. Sometimes, we simply don’t know what happens post-award and whether your suppliers are being responsibly and reliably managed at all.

Bottom line: ignoring your suppliers post-award will seriously impact your bottom line. Even though it might seem like a lot of work at first, it’s important to keep track of what your suppliers are doing and having dedicated resources to hand-hold the supplier-stakeholder relationship will pay-off when it comes to your supplier relationships. By monitoring them regularly and making sure they’re doing what they say they’ll do, you’ll improve your relationship with them and reduce the risk of problems down the road.

So don’t ignore your supply chain, and take the necessary steps to strengthen your supplier management game.

#2 Your supplier list is out of date and you don’t have instant access to supplier data.

A good supply chain management system will help you keep track of your suppliers, after all, it’s hard to manage relationships with suppliers when you don’t even know who they are or what they do. You can’t be sure if your suppliers are reliable, if they’re meeting their commitments and goals, or if there are any issues that need to be addressed. If you’re not using a system to help collate this data, it’s easy for your supplier list to get out of date. This can lead to missed payments or late deliveries, as well as other issues that could affect your bottom line.

If there’s an issue with one of your suppliers, or if you want to find out more about them, the last thing you want is for the process of finding out information about them to take weeks or months. Your system should provide instant access to all your supplier data so that you know exactly what’s going on at all times — even if it’s something bad.

#3 You have no way to analyse your contracts, or worse, not having a contract:

A contract defines the relationship between two parties and should be reviewed whenever there is a material change in circumstances. It should include specific provisions regarding quality, delivery dates, payment terms, penalties for non-performance, dispute resolution processes etc.

It’s vital that you have access not only to the terms and conditions of each contract but also any subsequent amendments made along the way — otherwise, there may be clauses in place that aren’t serving either party well. A good supply chain management system will allow you to analyse each contract on an ongoing basis so that nothing gets missed.

#4 Not Having Clear Expectations and Lack of Visibility on whether those Expectations are being met:

Make sure that all parties involved in the supply chain understand their roles and responsibilities clearly from the start. This will help avoid misunderstandings that could lead to delays in delivery or non-conformity issues later on down the line. It also helps eliminate finger pointing when issues arise because everyone knows what’s expected from them at all times.

Make sure you have access to accurate information about your suppliers’ performance against those expectations and their obligations, including delivery times, quality levels, price changes etc., so that you can make informed decisions about working with them in future years as well as provide support when needed (e.g., during natural disasters).

#5 Not Being Transparent With Your Suppliers and Poor Communication:

Open communication goes a long way when it comes to building trust between buyers and suppliers alike. Communication is key to successful supplier relationships. Issues should be handled quickly so they don’t become problems later down the road; this includes communications from your team members as well as from suppliers themselves. Check your contract for audit and review clauses and suggest a routine schedule.

What can you do now to make sure you don’t fall victim to any of these mistakes?

Get yourself a Contract Management System!  At Accord Contract Management, we strive to provide a service that enables you to see the complete picture of your contract and you can have all the information right at your fingertips. Develop clear insights using Accord to record, review, and rate your suppliers and their contract performance. You can also identify risks, cost-saving potential, innovative triumphs, value-for-money projects, and customer happiness through Accord’s tools that enable collaborative contract management between suppliers and stakeholders.

Let’s discuss your supplier management plans today: book a demo!