As public procurement professionals in Fiji, supplier management is a critical aspect of your role. The effectiveness of your supplier management can have a direct impact on the success of your procurement projects. In this article, we highlight ten key lessons on supplier management that you need to know to achieve success in your role.
Lesson 1: Develop a robust supplier selection process
The first step in effective supplier management is to develop a robust supplier selection process. This starts at the planning process before you tender. What you put in the specifications determines the kind of suppliers that will participate in bids. This process should be transparent, fair, and consistent to ensure that you select the best supplier for the job. By developing a comprehensive selection process, you can minimize the risk of selecting a supplier who is not capable of delivering what you need.
Lesson 2: Establish clear expectations
Once you have selected your supplier, it is essential to establish clear expectations. This includes outlining the project requirements, timelines, and budget. Ministries must be clear on what they want and the standards the service or good must be provided. By clearly communicating your expectations, you can ensure that your supplier understands what is expected of them and what they need to deliver.
Lesson 3: Communicate regularly
Effective communication is critical to successful supplier management. You need to maintain open lines of communication with your suppliers throughout the procurement and contract management process. Regular updates and feedback can help ensure that your supplier stays on track and delivers what you need.
Lesson 4: Monitor, Monitor, Monitor
Monitoring supplier performance is essential to ensure that your supplier delivers on their promises. Regular performance monitoring can help you identify any issues early and take corrective action before they become major problems. This will be based on previously agreed-upon KPIs at the time of contract award. It is important that monitoring must be done by qualified individuals who won't merely view the work as a "check in the box" activity.
Lesson 5: Manage risks
Supplier management involves managing risks. The world we live in has changes. The dynamic global issues we face means we are susceptible to changes. You need to identify potential risks and put measures in place to mitigate them. This includes developing contingency plans in case of unforeseen circumstances that may impact the supplier's ability to deliver.
Lesson 6: Foster ethical relationships
Fostering strong ethical relationships with your suppliers can help ensure that they remain committed to delivering quality work. Building positive relationships can also help you negotiate better terms and conditions for future projects.
Lesson 7: Encourage innovation
Encouraging innovation from your suppliers can help you find more cost-effective and efficient ways of delivering your procurement projects. By providing your suppliers with opportunities to innovate when you call a tender and help drive continuous improvement and add value to your procurement projects.
Lesson 8: Ensure compliance
Compliance with procurement regulations and policies is critical to successful supplier management. You need to ensure that your suppliers are compliant with all relevant regulations, policies and the supplier code of conduct to avoid any legal or reputational issues.
Lesson 9: Provide feedback
Providing feedback to your suppliers is essential to help them improve their performance. Regular feedback can help your suppliers understand what they are doing well and what they need to improve. Don’t provide feedback when there is a public complaint. Be proactive and improve on issues when you see them.
Lesson 10: Continuously improve
Finally, to achieve success in supplier management, you need to continuously improve your processes and practices. Learnings from previous contracts must be considered in new projects. This includes analyzing your procurement projects and identifying areas for improvement. By continuously improving, you can ensure that you deliver better outcomes for your organization.
In conclusion, effective supplier management is critical to successful procurement projects. By following these ten key lessons, you can improve your supplier management practices and achieve better outcomes for your organization.