Our turf or theirs?

Green (2002) suggests that making someone come to you, for example for a meeting, is a sign of power. Indeed powerful people will often invite others to their office, just like getting summoned to go to see the boss in his office, on his turf. Making others come to us gives us a small psychological advantage; putting them in unfamiliar territory, isolated from peers and that which normally provides comfort and security. When negotiating with a supplier, having them come to us can really help. Therefore surely it must follow that when conducting a supplier review we should make the supplier come to us? Perhaps, but this is not necessary beneficial to the overall relationship. A common misconception is that suppliers have some sort of inherent duty to attend meetings with us, like part of the cost of sales, a necessity for the supplier to bear, or even just a bit more discount of the purchase price because they pick up the tab. Indeed large companies will have considered and planned for this cost within what they do, which means we are indirectly actually paying for them to attend.

What is appropriate here depends upon the nature of the relationship we are seeking to have. Once again we refer back to portfolio analysis and supplier preferencing (Figure 9.10) as well as our segmentation. If we believe the supplier sees us as Core and we are sourcing Leverage categories then it may be entirely appropriate to make the supplier come to us, on our terms. However, for a relationship in Exploitable for Critical categories where we

FIGURE 9.9 A 3p agenda for a supplier review meeting

A 3p agenda for a supplier review meeting

FIGURE 9.10 Using portfolio analysis and supplier preferencing to guide how we approach a supplier review meeting

Using portfolio analysis and supplier preferencing to guide how we approach a supplier review meeting

have identified significant risk we may need to go to them - apart from the fact that the supplier may have little interest in coming to us, but visiting them shows effort on our part and creates a degree of obligation to the relationship from them. It also provides a basis to get to know them more and better understand our risk exposure.

Where the supplier relationship is important or critical and we need and want supplier collaboration (eg Core or Development with Strategic) then our reviews should be similarly collaborative. In practice this means sharing or alternating locations or perhaps using neutral locations. It might also mean considering the cost of conducting reviews as attending any supplier review presents a cost to both in terms of preparation, effort, time, travel and cost of following up on actions. In a large organization this cost gets absorbed as part of the cost of doing business but consider an important or critical relationship with a small innovative supplier with whom we see great future potential and want to develop the relationship. Requiring that this supplier travels to meet with us for a supplier review could be a big deal, perhaps demanding a day out and the associated cost of travel. Small, developing companies typically fail to appreciate the demands large clients might place on them beyond the provision of the actual goods or services. As such they fail to plan for the cost of such demands, moreover in their enthusiasm to please the client they can simply not know how to raise a concern about the burden attending supplier review meetings can bring. As a consequence, and what might seem a normal request by a large company for regular meetings, could inadvertently drive destructive responses from a struggling supplier, perhaps causing them to feel aggrieved, cheated and driving behaviour so they seek to claw back something from us at the next opportunity. They are likely to resist attending, make excuses or resist bringing the right people. If we are seeking a collaborative relationship with mutual willingness where the supplier is helping us work towards mutual goals then requiring them to attend at their cost could undermine this. This is no time for leverage behaviour on the part of the buyer. Instead, it is essential to consider, and be sympathetic to, the supplier's position, and to take positive steps, as appropriate, to ensure the process of reviews reflects the nature of the relationship we are seeking. This might include:

• Paying the supplier to attend - if we see the value of supplier reviews then why should we expect this for free. Consider agreeing a 'relationship management' fee within the overall engagement with fees to cover the supplier's time here. Such an arrangement allows expectations to be clearly defined in advance including who you expect the supplier to bring for reviews.

• Sharing the cost - quantify the cost of parties attending for a review meeting other than time (eg travel, subsistence etc), and agree to share it equally.

• Going to them - travel to them, especially if they are a small supplier or we want to use the opportunity to visit their facility and assess risk.

• Alternate locations - share the burden by alternating locations.

• Web or video conferencing - web and video conferencing is now a viable alternative to face-to-face reviews, either for all reviews or just some. Consider a full review in person with interim reviews carried out remotely.

Finally, consider the nature of the location for a meeting and ensure it is conducive to what you need to achieve. If you want to host a joint collaborative meeting and stimulate creative thinking from those attending, shoehorning a bunch of people into a tiny meeting room will most likely be unproductive. Here a more pleasant environment that puts people at ease and with space to run working sessions would be more suitable.

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