Most practitioners in present-day procurement and supply chain jobs will be all too aware that AI and machine learning-powered automation is coming their way.
However, one procurement veteran has shared insights into the uniquely human dimensions of the procurement process that automation may free practitioners to do more of nurturing and sustaining mutually beneficial relationships with key suppliers.
Seasoned procurement practitioner Iain Steel maintains that professionals in today’s procurement jobs, whether they’re permanent team members or procurement interims, need to go beyond issuing various RFXs to work diligently on understanding the supplier’s perspective more intimately – work that he insists often results in “an overwhelmingly positive impact” on both parties:
“For the supplier, working with a team who understands their position can help them make the best decisions and put their best proposal forward.”
Invitations to tender often place considerable burdens on prospective suppliers, including cost: a great deal of time and effort has to be put in to producing a positive and convincing proposal.
Suppliers have to weigh up risks: an RFP that places too much risk on their shoulders may deter them from proceeding.
A rock-bottom bid price may necessitate extra costs such as increasing capacity by hiring additional staff, not to mention additional logistics and training.
Steel believes that continual, informative and sensitive communication with suppliers is the key to success.
He suggests talking openly with bidders about what the firm is seeking to accomplish by running an exercise that makes it plainly visible.
This communication and clarity can be enhanced by bringing business stakeholders into the communication loop with bidders, and by holding suppliers’ days to multiply the communication and clarification opportunities.
Ultimately, suppliers need to be confident that a successful bid on their part will add value to their own business needs – it’s not a one-way street from supplier to client.
When the value relationship is mutual, Steel observes, even the smallest contracts become true partnerships.