Trust and a sound relationship are fundamental to any supplier partnership deal, according to Dale Mullane, head of procurement at Peel Group.
“For the supplier, that means delivering what you have promised,” he says.
“However, we also have to be transparent and stick to what we have agreed with CLM, our fleet management company. And of course, it’s important to pay on time.”
KPIs are an essential tool for ensuring delivery and standards, but Mullane warns that they should not be seen as unilaterally binding.
“KPIs should go both ways. It’s easy to see them as a tool purely for monitoring the supplier, but we should also see what they say about our performance – it’s a two-way street,” he says.
Importance of transparency
Geoffrey Bray, chairman of Fleet Support Group, has very clear views on the need for trust and how both sides can encourage it.
“I tell clients what I make and how I make it; how we have to make a profit and what that profit is spent on. Transparency is very important. There can’t be a hidden agenda – if you can’t both be frank and clear about what you want to achieve, you won’t achieve anything.”
Bray believes so strongly in trust as the basis for supplier relationships that he is prepared to work without a contract.
“We can be judged on what we do rather than what we promised we would do,” he says. “Trust is hard to gain and easy to lose.”
Courtesy and co-operation are important even for buyers with a lot of financial clout. David Graham, fleet manager at E.on UK, oversees 4,500 vehicles.
“It is very easy for us to tell what we want or else. But the ambition must always be to do nice business with nice people,” he says.
“Good relationships maintain quality, always. If I want you to go that extra mile for me, you need to like working with me.”
Graham says clients should try to be straightforward, easy to deal with, fast payers and learn to question and challenge suppliers in reasonable and constructive ways. The best results come from firms who rate you as a good client.
If the tender is handled properly, trust can start to be engendered with all the participants, even those who fail to win the contract.
Being clear about what you require, laying down sensible criteria about the kind of company you will trade with and giving feedback to those who didn’t win – this time – helps to promote your image as a good firm to do business with. Tenders are expensive for suppliers to participate in and treating that investment of time and effort with respect will pay dividends.
Trust also comes from proper management of the contract. Northern Gas Networks’ head of maintenance Graeme Liddell says: “Building trust with a supplier is key and it is crucial that a strong team manages the relationship for the business to ensure the best return.
“We work closely with our suppliers and experience tells us that face-to-face meetings are vital to the process. We also keep a very close eye on the KPIs we have agreed with them to ensure that all our expectations and goals are being met.
"Also, we agree bespoke metrics with our suppliers to ensure data is relevant to our business and helps
It is always important to remember that your supplier needs to make money too and that driving too hard on price will undermine mutual confidence; either the supplier will fail or service levels will suffer.
Graham advises companies to ask themselves: ‘How expensive is it for you when a supplier folds?’ “It is not free to change supplier, there is a cost to it,” he says.
Decisions need to have been approved at a senior level within the business.
Having an agreement revoked because it was granted by someone with too little seniority undermines the relationship.