Manage supplier relationship

Develop a strong collaboration with your supplier throughout the delivery phase

Why it's important

Managing your relationships with suppliers is important at all stages of the procurement cycle, but particularly critical during the delivery phase.

Effective supplier relationship management helps:

Challenges to building trust and understanding can include:

using the contract to overcome problems rather than discussion
overuse of performance monitoring, leading to a lack of trust
misunderstandings relating to working culture or values
using rigid, ‘one-size-fits-all’ contracts that are not designed for technology projects
an over dependence on one supplier, leading to a deterioration in quality or a lack of innovation

To meet these challenges you should:

ensure that problems are resolved as early as possible, without involving the contract or legal teams
use contracts that allow for flexibility and adaptability in how outcomes are delivered
agree a code of conduct with the supplier at the start of the contract
use incentives to drive improvement in supplier performance
involve the supplier in drawing up product plans or ‘roadmaps’
allow the suppliers to propose how they will deliver their outcomes
allow the supplier to review the performance of your organisation
allow more than one supplier to work on larger projects, by breaking them into chunks or allowing suppliers to collaborate

You should only end a contract early with a supplier if there has been:

a serious breach of contract, for example if a supplier hasn’t done everything they said they would
consistent poor performance that hasn’t improved following an improvement plan

resolve problems early through discussion and collaboration, not contract enforcement
allow the supplier to feed back and suggest improvements
consider involving the supplier in product strategy and planning sessions