Love me Tender? Not Likely!
Problems with suppliers create problems for your business. Consider those suppliers who can’t meet deadlines, are financially unstable, have staffing issues, can’t deliver the required quality of work or have weak compliance standards – the list of potential problems can run on and on.
When your business runs into these problems, it’s not just your bottom line which will suffer. Consider the disruption you face if the supplier can’t deliver on time and on quality. The repercussions will reverberate throughout your business affecting your client outcomes, and the reputation of both their business and yours.
Three-quarters? You’re kidding, right?
No, that figure is right. Almost three out of every four dollars spent in your business is likely to be spent with suppliers. And yet, and yet…we let most of those dollars slide through our fingers without making sure we get the most bang for our buck, including the performance levels we are paying for.
When we’re talking about three-quarters of all expenditure, doesn’t it pay to make considered, intelligent, rational and well-conceived decisions about just who that relationship will be with? Doesn’t it pay to consider modern procurement and adopt the best possible decision-making strategies to maximise the return on your investment?
Tell me you’re good and I’ll believe you
Would you consider hiring employees by simply inviting them to send you a CV and making your decision on what’s written within those documents? If you do, you’ll find yourself with a new employee who can write nicely and has an impressive list of self-confessed credentials. But if you’re not prepared to meet with them and challenge, engage and test them you’re headed for trouble.
To tender or not to tender
And yet, this is how we often choose our suppliers. We ask them to tender for the contract. We give them a detailed document and leave them to fill it in.
The tender is like that resume we asked potential employees for, right?
But we would never just leave it at that when it comes to adding to our workforce. We don’t do this for employees at even the lowest level within our organisation. We certainly don’t do it when it comes to hiring key personnel.
For a long time, this is how procurement worked within many organisations: Suppliers would self- nominate or be invited to tender. The organisation would provide the documentation and the supplier would diligently fill it in.
Are you still doing this in your role as procurement officer? Calling for tenders and making the decisions – the huge financial and strategic decisions – to collaborate with a supplier based on what they’ve written in that unwieldy document?
A better way
Modern procurement is so much more than this. Modern procurement recognises the multi- pronged approach needed to create great relationships with efficient and innovative suppliers.
That’s what you want for your company, right?