No matter how good your relationship may be with your suppliers, there’s always room for improvement. That improvement may be in the form of greater process efficiency, product development collaboration, minimizing supply risks, or a host of other areas. But at the end of the day, what you’re really looking to do is reduce costs (although those ‘cost reductions’ manifest themselves as price cuts, reduced risk, greater efficiency, etc.).

One wrench in your tool kit should be supplier site visits. While the value of these visits has long been recognized for direct materials, they can also provide significant value in addressing indirect categories. If done well, these site visits can provide you with greater leverage in supplier negotiations, with only a minor incremental workload on you personnel.

It’s best to break the supplier visits process into three parts; Prework, Execution Phase and Post Analysis. I’ll go through best practices for Prework today and dive into the other sections in parts #2 and #3.

So, what should you do before actually setting foot on your supplier’s site?

• Contract Review - Any and all contracts with the vendor in question need a thorough review in order to define the scope and objectives of the site visit. Just because you come across something that’s an opportunity for improvement, doesn’t necessarily mean it’s actionable since your current contact may tie your hands (although it’s good to note for next time you negotiate that aspect of the contract). Therefore, this is often the when the scope of your current efforts evolves.
• Supplier Data Request - Defining the opportunities, scope and objectives will leave you with some questions you can’t answer alone. So requesting the right data from your suppliers is a major help in the prework process. The key here is to walk a fine line with your vendor. Presenting your request in the context of vendor development rather than cost cutting will help uncover the right information without raising too many red flags. For example, asking for org charts and disaster recovery plans is fine, while requesting full cost breakdowns of your components may put them on the defensive.
• Scheduling - Set expectations with the supplier about what you want to accomplish with your visit and work with them to identify who on their end needs to be available. The last thing you want is to go through the time and expense of going onsite only to realize the people you really need to meet with are at Disneyland that week.
• Analysis - Once you’ve done the homework, meet with your stakeholders and category managers to review the data, revise your objectives and develop your hypothesis.

With those steps checked off your list, you’ll be ready to go onsite with clear goals and minimal chances for surprises.

Deitra Curry is a Senior Sourcing Consultant in Ariba’s Spend Management Services group. Ariba Services Category Manager Justin Falgione contributed to the research and analysis in this post.

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