Procurement officials should develop good supplier relations in order to maximize the benefits to the organization. This is sometimes challenging due to agency practices associated with restrictions on external parties’ communications. The restrictions generally stem from cases where abuse and undue influence have plagued the procurement environment with bad press and public distrust. The result is a high level of caution almost to the detriment of the entity. In some cases, the reaction to experiences colored by improprieties either apparent or real is memorialized through the implementation of laws, rules, or policies or the highly conservative interpretation of such laws, hindering the communication with suppliers.
Procurement officers with a good moral compass understand how to navigate communications in a way that professionalism and high ethical standards are upheld. Likewise, suppliers who are seeking a long-term relationship understand that crossing the line could cost them much more than their business. I agree that ethical behavior should remain front and center when it comes to procurement-related conversations. I also believe that effective communication is the key to success in every facet of our lives, including business. Unfortunately, in extreme cases, the topics of ethics and conversation with suppliers appear as polar opposite and used as an excuse to avoid vendor meetings. This is not a strategic approach. Instead, it is a missed opportunity.
Regardless of the industry, effective communication is the key to developing successful business relationships. This is true whether prior to or after entering into a contract. Sharing unrestricted information is beneficial to both parties.
Given the constant complaint of resource insufficiency, procurement professionals need to be more strategic about how they invest their time. Talking with suppliers is a form of primary market research. Leveraging the supplier’s market intelligence, for example, can help the procurement professional be more strategic.
Procurement professionals’ expertise is in process and, with some exceptions, not in the intricacies of product or service details. Rapid changes in technology, goods, and services make it challenging for procurement professionals to stay up to date on the benefits and features of new products. This is particularly the case when procurement professionals claim to be a “jack of all trades” in environments where resources are scarce. The absence of adequate resources may cause procurement professionals to try to juggle too many requests without the necessary tools, leaving very little time, if any, to conduct research to learn about any changes in the market.
The expectation of many procurement professionals is that the end-user should provide a clear and concise scope of services or detailed specifications. The rationale is that the end-user is responsible for providing well-written specifications or at least know the essential requirements that need to be included in the solicitation. It might seem logical to assume that the end-user is up to speed on current trends within their area of responsibility. Sadly, that’s not always the case.
In my experience, receiving high-quality specs is rare. Yet, we should not be too critical. End users are subject to the same time and resource constraints that limit opportunities to learn about market changes and conditions as procurement professionals. Also, like procurement staff, end-user personnel might also be required to restrict their communication with external parties.
Although the expectation is to put the knowledge burden on the end-user, many procurement professionals dislike the thought of end-users going directly to suppliers to obtain information. And when the end-user has done so, the suspicion of unfair advantage for a single or select group of vendors may come into play. I should point out that significantly restricting communication with suppliers whether by mandate or choice conflicts with the expectation of well-written specifications.
Conversations with suppliers are a form of market research. Although market research is a process that procurement professionals should employ frequently, the reality is that many are so overwhelmed with the number of requests that market research falls on the back burner. Realistically, not much market research is done on products or services that we consider routine. This situation is less than optimal particularly when procurement is not successful due to outdated specification requirements.
There is a solution to this dilemma. Develop a written protocol for supplier meetings.
Formalizing Supplier Engagement Practices
A written protocol helps achieve consistency when meeting with suppliers. The protocol should be cross-referenced with the agency’s ethics guidelines or policies and define how to appropriately meet and engage with suppliers to make the best use of each interaction. Adopting the new protocol as part of the written policy and procedures has the added benefit of institutionalizing a practice that ensures a level playing field for all suppliers while giving staff a referenceable structure to guide their communications with suppliers.
Implementing the protocol can be aided by developing a Supplier Meeting Form. The Supplier Meeting Form provides an in-the-moment resource to guide each meeting, capture essential information, and provide documentation that supports transparency. The structure of the form is simple with three primary sections to completed during each meeting: General Information, Market Research Questions, and Action.
- General Information. Capture the supplier’s name and contact personnel, the industry where they compete, and the category, product, or service that they provide. The form can also include the name of the attendees and the date of the meeting.
- Market Research Questions. As much as possible, note on the form any topics of interest and specific questions prior to the meeting. Questions may relate to trends, changes, and industry innovations. Possible questions to include:
- What are some of the trends in the industry, and what should procurement professionals be looking to adjust in their solicitations? (i.e. economic trends, import/export issues, environmental requirements, new technology)
- Is there any legislation that could potentially impact some of the past requirements included in specifications?
- What requirements are you not seeing in solicitations that may help agencies obtain more cost-effective products/services?
- Action. Include information on any actions taken during the meeting. This could include proposed “next-steps” such as follow up demonstration, internal research, additional market research, or any other action taken. It could be that no action is necessary at the time.
Scheduling Meetings to Maximize Time and Opportunity
I liked the strategy that my executive assistant implemented scheduling shorter meetings. Instead of a full hour meeting, she scheduled half-hour meetings, especially if it was the first-time meeting with a supplier. This helped keep the meeting focused on the main topic as opposed to sitting through a half-hour of marketing material.
Suppliers should be advised as part of the meeting confirmation process that they should plan to spend no more than three minutes on company introduction. While the marketing material is often very impressive and showcases the supplier’s market position, the potential for time to be spent in this way discourages already overextended procurement professionals from granting a meeting in the first place.
Some of my colleagues may be interested in a higher level of detail, but I doubt that they have the luxury of time. Time was such a precious commodity for me that it was essential to be as strategic with it as possible. I delegated gathering any needed background details to someone in my team. This is where “leave behind” marketing information became handy.
How Many Meetings? With Whom?
Sound, supplier-neutral specifications are not built out of conversations with a single vendor. Through multiple interactions, I was able to learn and ask better questions of each supplier. When the quality of your questions improves, so does the information that you receive.
Inviting an end-user to the meeting can also be beneficial. Although, I recommend being clear on the potential benefit to the end-user before engaging more people in the meeting. The more people that you involve in a meeting, the harder it is to coordinate and the longer it may need to be. The idea is to keep this process simple and with minimum disruption to an already packed schedule.
I want to emphasize that any process can work provided that those involved proceed ethically. While there are many written ethical standards and guidelines, these are useful to define potential circumstances that may be perceived as problematic. The existence of written guidelines can also help elevate the awareness of individuals in an organization. In the end, it is necessary to rely on each individual’s good values to adopt and model behaviors that ensure transparency, fairness, and good business practices.
To summarize, communication with suppliers is necessary to develop good business relationships and solicitations. Procurement professionals can make communication with suppliers more purposeful and strategic by implementing simple agency-wide protocols. The information gathered may help the procurement professional ask better questions, prepare higher quality solicitations that are better aligned with the market conditions, and reduce unsuccessful procurements due to quality issues.
Meetings with suppliers can be a worthwhile investment of time if the procurement professional chooses to be more strategic and intentional in his/her communication. Ethics, training, and guidelines are helpful, but it is ultimately an “inside job” that determines whether these values are put into practice. Agency leadership need to model and reinforce the importance of ethical practice, and each individual making the commitment to doing the same.
By Lourdes Coss, MPA, CPPO – Sept 2020
Procurement Transformation Blog – www.lourdescoss.com
About the Author: Lourdes Coss is a former Chief Procurement Officer living her purpose. She’s the author of “Procurement Methods: Effective Techniques” and is using the lessons of her 27 years career in government procurement and transformation to coach, train, and provide consulting to leaders and aspiring leaders in the profession. Post-Pandemic, you may find her in a café writing her next book.