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8 Tips on Collaborating with Multiple Suppliers

Working with multiple suppliers increases the chances of producing innovative ideas, but it's difficult to manage the logistical difficulties and encourage suppliers to open-up in front of one another

“Innovation projects” have been popular with procurement teams for many years now, and for good reason. If a procurement team can provide ideas that bring in more revenue, rather than just contain costs, colleagues in other functions and parts of the business will find its services far more valuable.

Right now, however, growing numbers of procurement teams are interested in collaborating simultaneously with multiple suppliers to come-up with new ideas or ways to improve existing products and services.

In fact, 59% of respondents to a recent CEB benchmarking survey on supplier development and innovation say they’ve worked on multiple collaboration projects.

Eight Tips

In practice, however, these initiatives can be difficult to carry out. Working with multiple vendors on a single project can present pitfalls: Will suppliers feel comfortable sharing information with each other, especially if they are competitors? Will they get along? Will logistical difficulties of working with a greater numbers of suppliers complicate the initiative?

These tips will help.

  1. When possible, invite senior non-procurement leaders to important events, like supplier summits: Their input can help Procurement position the project as an important opportunity for suppliers, and will highlight the company’s commitment to partnering with them. These senior participants can also share specific information that Procurement might not have, like business unit objectives.

    Inviting senior execs to these events can also help raise Procurement’s profile in the business. But Procurement should make sure not to waste their time: discuss expected outcomes beforehand to help everyone keep an eye out for unexpected results or new intelligence.

  2. Communicate the value of supplier participationVendors prioritize collaborative partnership — as opposed to a relationship that doesn’t go beyond the transactional — when determining which companies are their customers of choice. Procurement functions can make it clear that they are interested in collaborating with a supplier on new projects to improve their standing as a customer.

    What’s more, if procurement functions can involve senior-level participants from across their firm, they can present this as an opportunity for the supplier to explore other types of investments with the business.

  3. Set up confidentiality agreements ahead of time: Procurement should have clear, strict policies in place about sharing information during collaboration. This will help ease supplier worries about sensitive information, and keep them focused on the work at hand.

  4. Use a social gathering to help participants feel comfortable working together: Holding a casual session for supplier executives before kicking off a project works wonders. It will help vendors get to know each other in a more relaxed setting and increase their comfort about the purpose of the project.

    For instance, one procurement function hosted day-long supplier summits which involved competing vendors; the function held a dinner the evening before the event, which got the suppliers talking and ready for the next day.

  5. Encourage feedback and provide chances to share ideas anonymously: At supplier events, Procurement can capture candid comments from participants using simple tools like Post-It Notes. Allowing anonymous comment means vendors will feel more comfortable sharing.

  6. Lead by example to encourage information sharing: If Procurement is open with what it shares, especially when it comes to sensitive details that are key to the conversation, suppliers are more likely to contribute their own information.

  7. Conduct “dry runs” of supplier events: Procurement can invite a select group of participants to help test parts of the session ahead of time to figure out what works and what doesn’t.

  8. Create a plan to move forward: Procurement teams should develop templates to capture ideas and create project plans with action steps for after their meetings.

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