Scott Collins, Director, Hawtrey Dene Consulting
What do you do?
I work with private and public organisations to help them get better value and outcomes from their procurement spending. I help them identify new opportunities to improve efficiency and reduce costs. It’s not about changing suppliers for the sake of it or saying, ‘let’s make it cheaper; it’s about bringing suppliers and customers together to make the most of their relationship and start thinking about what they can do that would be mutual benefit.
We spend time looking at the processes involved in delivering goods or services and the outcomes that their procurement supports or seeks to achieve, be it ease of operation for an end-user or a better shopping experience for a customer. In starting with the desired result, we can map the current processes and explore how we can introduce and shape greater focus and simplicity.
How can organisations get more value from their procurement spend?
If you want to know how you can make the most out of what your suppliers are delivering for you, then ask your supplier! They are the experts in their field, and there will be a lot they can do but won’t necessarily consider offering unless you ask. So the first step is to start having those conversations and set a framework for sharing and exploring ideas.
Secondly, it is about recognising that suppliers are some of your key stakeholders, so you need to value their input and take time to engage in regular two-way dialogue. It’s essential that you are listening and learning from them as you are buying from them. My experience across various industries is that the best performance comes when there is a closer relationship between the customer and the supplier and an understanding that achieving value is a two-way process and should benefit both sides.
If you are not managing the relationship with your suppliers, you are missing out on innovation, operational efficiency, training, and continuous improvement opportunities. A bit like a relationship, if you are not nurturing or focusing on it, then the basics can fall apart, and one of both sides ends up in a situation that isn’t the one they entered into or hoped to achieve.
“The first step is to be very clear about what the contract aims to deliver and how you will measure that. You can’t take that supplier relationship to the next level unless you are achieving the primary contract aims and are happy with the delivery of services. Once you have the basics in place, you can start mapping out other opportunities and exploring what your suppliers can do with you to drive innovation and look at mutually beneficial opportunities to shape the relationship.”
Has the pandemic helped to highlight the importance of client and supplier relationships?
What an organisation knows about its supply chain has been key to unlocking the best performance during the pandemic. Those with the most robust supplier relationships have seen the most significant benefit because the regular dialogue was already in place, and suppliers were providing solutions which enabled them to adapt more quickly.
Organisations that didn’t have that close relationship encountered problems. For example, it’s not untypical for contracts to be put out for tender and then essentially left to run their course because they are perceived to be running trouble-free. That meant that some organisations didn’t have access to crucial information like their key account contacts and fundamental business continuity or risk mitigation plans during the crisis.
Where should companies start?
The first step is to be very clear about what the contract aims to deliver and how you will measure that. You can’t take that supplier relationship to the next level unless you are achieving the primary contract aims and are happy with the delivery of services. Once you have the basics in place, you can start mapping out other opportunities and exploring what your suppliers can do with you to drive innovation and look at mutually beneficial opportunities to shape the relationship.
Is it essential for companies to use local suppliers?
I don’t think it’s necessarily about just awarding contracts to someone ten miles up the road, although where that works, it can be a great option. We must remember that many national suppliers will subcontract locally or employ local people if they have a nationwide service reach. I think the key is having a system in place where you have clear targets around your supplier targeting and diversity, locality, scale and other aims and monitoring and measuring these regularly. Start by looking at your suppliers now, and you might find you already have high numbers of SMEs or local people recruited in your supply chain that will help you start a strong baseline and set realistic targets.
How we can help
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