For Supplier Cooperation, No Surprises

In a recent poll conducted by Supply Management, more than half of buyers (55%) have experienced problems introducing suppliers to e-procurement systems. But the other 45% did not. What was the difference? How the new technology was communicated to suppliers. While some buyers used carrots and others used sticks, which typically worked if nothing else did, communications about the change seemed to help reduce the FUD factor (fear, uncertainty, doubt).
While the results of this poll seem like a no-brainer, it amazes me how many customer firms neglect the communications piece both inside and outside the enterprise. Companies often do not make a concerted effort to communicate about new systems, policies and procedures either to employees or to suppliers or other stakeholders. For example, one supplier manager lamented to me that their suppliers were resisting a new evaluation program. As he explained the new program to me, I learned that they had sprung it on suppliers unexpectedly, with no explanation or advance warning. No wonder the suppliers were wary and uncooperative. They had no idea of what this system meant, why it was being implemented, how they were being rated, and whether they were in danger of losing business. In another example, a company developed a supplier evaluation, but had not told its suppliers or even other internal purchasing people. The several people who had worked on it were contacting suppliers one by one to schedule evaluations. It simply hadn’t occurred to them they needed a more visible, closed-loop process. Clearly this new evaluation had been created and deployed in a vacuum and had very little chance of success.
While these stories may seem stranger than fiction, I’ve found that they are fairly typical. I have various theories about why internal and external communication in some companies can be poor. Usually, it starts with senior management. If they set a tone of open and honest communications with employees, emphasize the importance of it, and model it themselves, then communications become ingrained in company culture and its ways of doing business. If the culture is one of secrecy, withholding information as a way of preserving power, and treating employees with mistrust, then it is likely that this culture may manifest itself in an overall lack of communications, within the company and with suppliers.

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