Supply Excellence — Supplier Site Visits Part #2: Going Onsite

Supplier Site Visits Part #2: Going Onsite

July 31st, 2008 · by Deitra Curry · No Comments · best practices, contract management, supplier management, supply management

Last week, we looked at some of the benefits of supplier site visits and the Prework steps you should take before going onsite. Whether you are truly looking for greater collaborative effort or evaluating the relationship from a cost/value standpoint, there’s nothing as effective as seeing the operation in person, meeting key people face to face and collecting data on cost drivers.

So, now that your homework is all done, what do you do to ensure you make the most of your time onsite?

Schedule Ample Time - In your Prework, you identified who and what you needed to see when you visit. Now work with your supplier to ensure that schedules align and provide you with sufficient time. As always with any meetings, it’s wise to give yourself some buffer time for those useful meetings that go over time. And it may also be worth considering some less structured time with key people over lunch, dinner or happy hour, when their cards about your relationship and their cost drivers may not be held as close to their chests.
Set the Stage - Although, as we discussed in the Prework post, you may not want to frame your visit purely as a cost-cutting expedition, you might have no choice. For example, if your company is public and just announced losses, layoffs or cost-cutting initiatives, you should assume your suppliers were clever enough to read about it in the news. Letting them know your intentions beforehand can help them digest the situation and propose solutions when you meet. While evaluating operational efficiencies and potential margin is the goal, re-evaluating your organization’s “needs vs wants” and the high cost drivers associated with low ROI can also be fruitful. Suppliers are always willing to tell you what you can do better to drive costs out of your programs.
Tour the Facility - This is particularly important when there are heavy services, in which case you should meet with employees and managers. Chances are you have been making some assumptions about the work being done, so here is your opportunity to truly find out what you are paying for. This is the time to assess unnecessary overhead costs, how key deliverables tie to resources & technology, resource distribution & professionalism, workflow, etc. Strategically, it may be ideal to simply note potential improvements and challenge your supplier at a later date.
Wrap it up - Make sure you leave some time at the end of your visit for follow up questions and some discussion of next steps. This is a great time to set any expectations you have for additional information with your key contacts, rather than resorting to the all too common extended email threads when you are no longer face to face.

I’ll cover our final step, Post-Analysis, next week.

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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