Contract managers right across Australia face difficulties in getting the most from their suppliers. How can we set up our contractual relationships so that the supplier will go the extra mile? Look no further than how we manage our staff and you get an idea of what better practice looks like. Here is a list of seven challenges contract managers often face and how to overcome them. Challenge 1: Setting up for success. Few contracts address transition, meaning suppliers cannot deliver full performance from day one. Yet we know the first 90 days are critical: the wrong processes and behaviours can become the norm and are difficult to unwind.
Challenge 2: Many contract managers forget that suppliers have aspirations too. How, then, can they expect a relationship to flourish?
Challenge 3: We asked 88 suppliers how clients could get more from them. A staggering number said, ‘return phone calls’. Many clients seem to think communication is optional, or it is okay to do everything in writing.
Challenge 4: Today, we are buying services, not goods. So supplier performance depends heavily on the motivation (and capability) of those delivering the services. Yet procurement too often ignores that a culture of ‘one team’ is critical to superior performance
Challenge 5: For some reason, procurement seems to talk to the supplier only once something has gone wrong. In scheduled meetings, the discussion often focuses on KPIs not achieved.
Challenge 6: It’s fair to assume suppliers also differ in their maturity, strengths and weaknesses. Procurement teams often miss this and forgo opportunities to build on suppliers’ strengths and work with suppliers to address weaknesses
Challenge 7: Most contracts lack meaningful KPIs. They are either absent or not linked to incentives that enhance performance.
This is the last of a series of articles that focus on what can be translated from the world of managing and leading staff to the world of leading suppliers. Read on to explore:
Or download our ebook summarising the content of all articles below. Never Waste a CrisisWhat COVID-19 means for procurement in AustraliaOur research report tells the story of how procurement teams across Australia made the most of this crisis. What's inside?
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