Peter Nowottny's blog

Supplier Management – the Cinderella function?

A client recently said to me that role of a full-time internal supplier manager is a bit like being an anaesthetist in an operating theatre – long periods of routine and boredom with occasional bursts of intense activity when things go unexpectedly and horribly wrong.  

Maybe this ‘anaesthetist syndrome’ is one of the reasons why so many organisations treat supplier management as the Cinderella function within their retained organisation?

... The Smart Alternative?...

No doubt you will have seen the embarrassing statistic that 70% of outsourcing contracts are simply ‘rolled-on’ at their natural termination date, without the benefit of any market competition or any significant re-negotiation.  Yes, there are very real pressures to stick with ‘the devil you know’, to prevent management overload and to avoid any risk of service disruption.

But is this passive acceptance of the status quo really the best we can do?   Is there a smarter alternative?

The most common complaint across all outsourcing relationships is the lack of innovation delivered by the supplier.

No doubt one of the factors which influenced you to outsource in the first place will have been the supplier’s plausible assertions that their broad customer base puts them in the perfect position to identify best practice and innovative approaches and then invest in and deliver pioneering solutions at acceptable cost and risk.