Is vendor collaboration simpler than it sounds

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Is vendor collaboration simpler than it sounds

  1. 1. Is Vendor Collaboration Simpler Than It Sounds?Vendor performance management is a process where you, as a procurement professional,advise your vendors of how well they are performing and what they can do better. Thisfrequently leads to better vendor performance and lower costs for your organization.Thats great, obviously. But, too often, it assumes that the learning and improvement isone-sided: only the vendor is evaluated and only the vendor improves.This one-sided approach leaves something to be desired because there may be cost savingimprovements that your organization can make but doesnt because you have no processfor soliciting vendors ideas on how your organization can improve. Vendors can oftenprovide a wealth of knowledge because they are in a unique position to observe whatpeople like you and organizations like yours do to be best-in-class. And vendors advice isfree!So, the one-sided vendor performance management of yesterday has to evolve into thetwo-way vendor collaboration of tomorrow. And it doesnt have to be difficult. Getting theflow of great vendor ideas started can begin with just asking a few questions, then sittingback and listening intently.Imagine the profit-boosting ideas you could discover just by asking these four simple, yetessential, questions of each of your strategic vendors:1. What can we do to be a better customer?2. What requirements of ours force you to jack up your price?3. What do other customers of yours do well that we dont do well or dont do at all?4. How can we collaborate to take cost out of the supply chain so that both of ourorganizations can be more profitable?The answers to these questions may unlock some untapped opportunities for boosting yourorganizations bottom line.And, because the business environment constantly changes, you can use these types ofquestions year after year to drive continuous improvement.

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