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Supply Management

By 11th March 2014No Comments

Whatever your nursery is buying, you need to get the best out of your suppliers.

Successful organisations of all sizes need to work hard to ensure they understand their supply needs and business objectives, and their suppliers’ capabilities. This involves developing an approach that reflects the requirements of the business.

Understand your requirements

Determine what you are buying. Whether it’s a commodity (e.g. stationery, printing) or a service (e.g. waste disposal, marketing) determine what is required, current/planned volumes, expected service levels, agreement period and order commitments. Understand your objectives: best value (balance between quality, cost and service), budgets, use of recycled products, sustainability policy and ISO accreditations.

Profile your ideal supplier

Determine the profile of your potential suppliers. National versus local organisations; suppliers specialising in your needs versus suppliers who provide a wide range of services/products; organisations with a multi-million pound turnover versus smaller organisations. Do you want to establish a ‘partnership’ relationship, or a more hands-off approach?

Select supplier short-list

In the short-list (4–6 options) include your current supplier, so that he is aware of what you’re planning, and continues to provide the existing service. If he is an effective supplier then he will want to retain your business. Look for recommendations from colleagues, review trade directories, talk to local groups and chambers of commerce. Talk directly to the suppliers, and visit them to make sure that they are viable, professional and not a ‘virtual’ organisation. If possible, talk to some of their customers.

Issuing the tender

This sets out the information you expect to receive from every supplier, for example

  • Requirements/volumes
  • Expected Service Level Arrangements (SLA), Service and Quality Management processes
  • Operational and quality processes
  • Pricing model template to compare responses; product pricing, add-on costs, fixed/variable prices, pricing variations
  • Term of the agreement, termination process
  • Project implementation plan
  • Staff information (e.g. retention, CRB checking)
  • Supplier financials, ISO accreditations
  • Customer references

Do not be afraid to go back to suppliers and negotiate with them.

Managing suppliers

Once you’ve selected a new supplier and transferred the service, the hard work really begins. Nominate someone to ‘own’ the relationship with the supplier, who will be the key point for monitoring the deliverables, resolving problems, reviewing changes in requirements and product/service changes,
and checking the invoices (depending on the size of your business, this could be you!).

Establish a regular formal review of the service delivery (SLAs, service and quality issues) and ensure that you establish and maintain a good relationship.

The best supplier relationships work well where there is strong communication  between parties, a clear understanding of their mutual responsibilities and where there is a common objective – to deliver a best value service to the customer for the commercial benefit of both parties.