As we talk and listen to clients and customer prospects about what areas trouble them the most, we are constantly hearing about supplier related issues and how they are associated with performance. Perhaps this should not be such a big surprise as the industry progressively moves towards more and more advanced outsourcing strategies, where internal project management of those resources becomes critical. How that is accomplished by companies can vary significantly depending upon the size of the organization, technology products involved and the proximity of the supplier to the customer. However, there are some basic issues which always are at the heart of a supply relationship with the customer and those will frequently spawn lively discussion and potentially may become points of disagreement.
Fundamental to any of these relationship issues will be three main drivers:
- Quality
- Compliance
- Cost
This triangular dynamic is one which will provide areas for disagreement as well as opportunities for significant growth and success within the relationship, something which will ultimately affect both companies.
Taking a look at these dynamic drivers individually, we observe that there are areas of concurrence for some, but also areas which are not and should not be negotiable. For example, there should be no latitude given by the customer to the CMO or the service provider in relation to compliance. Meeting governmental regulatory expectations has to be nonnegotiable and this needs to be agreed upon in the quality agreement between the organizations and practiced continuously by the supplier to assure the customer is never impacted.
Whatever the relationship agreement in the business and quality agreements, these agreements must be upheld. Frequent liaison opportunities between the customer quality representative and the supplier equivalent account quality liaison should be formalized to assure that incidents or potential incidents don’t “fall through the cracks”.
Aside from these formal engagements, as often as possible, developing a frequent collaborative informal networking style can pay dividends and serve to “grease the wheels” to prevent points of disagreement or misunderstanding.
Turning one’s attention to quality, this is an area where there could be an opportunity for disagreement and a listening to our clients, a scenario where companies are spending a lot of effort to assure agreed-upon quality standards are being met. The difficulty can be that although a supplier might be meeting the quality obligations as negotiated, there may be some issues in relation to the variance in a specific range. For example, on-time delivery which isn’t up to expectations of the client. Here then is an area where one needs to apply some up-front resource to correctly manage the situation. Areas like this should be assessed for possible risks ahead of any potential issues so that time isn’t wasted, and relationships are not damaged. This should also include an appropriate management escalation process to help address any issues that cannot be addressed locally by the respective site liaisons. One should stress, however, that this should be organized so that it represents an exception situation and not one that is going to be a regular or frequent occurrence.
Small changes in quality within the agreed standard and specifications can be tolerated especially for short periods, but any longer-term source of variance is not acceptable, so there needs to be a mechanism for dialogue to deal with and to ameliorate these such issues early to help maintain the relationship.
For these types of situation, it is acceptable to confront the supplier/supplier representative about these issues, but the type of interaction should be such as to prevent confrontation situations. From a relationship points of view, some conflict to air out ideas and stimulate discussion should be seen as a positive thing, but anything that leads to a full-on confrontation should be discouraged as this will be counterproductive and embroil both parties in needless wasted energy. Starting a discussion in these situations where there is a conflict of ideas can lead to a better scenario in the longer term, so this should be an inclusive part of the relationship.
Ultimately the goal is to reach a point where the supplier is easily in-tune with the requirements of the client and the client makes requests of the supplier which make it easy for them to succeed. This is often referred to as a “paddleboard” type relationship.
Lastly, the third driver in the supplier/CMO/client relationship addresses cost. Cost is a full and negotiable relationship driver, but this can be affected in a negative way if either of the two previously mentioned drivers becomes an issue. Cost will be set at the time the client supplier contract a set, but this could dissolve into a problem subject to performance issues. Clients will not pay for poor performance, so the price for the service must be appropriate and reasonable to enable the supplier to assure on time and quality performance is a given. Assuring that the communication is often and appropriate will help maintain the relationship, especially as issues arise – and they will, so the partnership needs to plan for that at the outset and have appropriate systems in place to handle those moments.
The best relationships for long-term stability our win-win scenarios where both companies profit and where both companies feel comfortable working together. Communication is the key here and that means listening to each other as well as talking. Relationships which listen to each other and act accordingly are those which ultimately have the greatest level of mutual success and that should be the goal in any partnership.
