5 Replies Latest reply on Apr 13, 2011 3:02 PM by laurenbossers

    Sympathy for the Supplier

    bdubois@kinaxis.com Apprentice

      No, I'm not looking to rewrite a famous Rolling Stones song. However I would welcome some input on Supplier Management in the face of the events in Japan. Recently I was participating in a RFP where many of the questions were focused on Supplier Metrics. There were the typical metrics around quality, delivery, cost and also a few around financial stability. So here are the questions of interest. What metrics are most important to you when you are measuring Supplier Performance? In the wake of unexpected events like those in Japan, do you apply an "exemptions" to suppliers that may be facing unprecedented disruption or do you expect them to have contingency plans in place regardless of the catastrophe? Looking forward to any feedback.

        • Re: Sympathy for the Supplier
          Benson.Bradley Newbie

          Mr. Dubois,

          I think that there are always gauges for determining who is the strongest supplier. Natural disasters are one of those such indicators, some of the companies in the Japan region may not recover. Of those that do, some will recover slowly, causing lag for their customers. Then there will be the few strong companies that recognize they still have customer demand and spring back into action. My advice would be not to show any kind of sympathy, a company strong enough to deserve you as a customer will be in the handful that get back to work.

          • Re: Sympathy for the Supplier
            Cberklich Novice



            When I first read the byline I chuckled. But immediately I know the serious nature of the idea.



            Contractually the type of catastrophe facing Japan is covered in contract terms and conditions as Force Majeure, which in general protects the supplier from being in breach.  But it doesn’t change the buyer’s perception of the supplier. We all know “perception” can be 9/10ths of the law.


            What doesn’t protect the supplier is when there is no Force Majeure; they just fall flat and don’t meet timing. The most important metric to me is that they meet timing and remain at or below budget.  If we agree that the lead time is 6 weeks, I would expect the supplier to have a delivery in six weeks, barring engineering redesign or general quality issues. 



            I have sympathy for the supplier when they are caught in the middle of disaster that in no way they could have prepared for; particularly if they are small and have few resources. Not all companies have many divisions to call upon to get back on their feet.  Our role in supply chain & purchasing is to have a plan B for all parts and commodities we are responsible for.


            There is little sympathy for over promising and under delivering.


            Cheryl B.


            • Re: Sympathy for the Supplier

              Just came across this article on P&G's first-ever supplier environmental scorecard: http://www.greenbiz.com/news/2011/04/07/procter-gamble-scorecard-puts-supply-chain-notice


              From the article:

              Suppliers get scored based on their year-by-year results, and P&G will publicly reward "exceptional performance," Hughes said. Rewards will also go to those that bring in innovative ideas. When suppliers score poorly, P&G will develop improvement plans to get them on track.


              I think this is just the beginning of the sustainability and "green" components being incorporated into supplier scorecards.