“Supplier Recognition: part 2”

Using questions posted by “Jason” with my prior blog as a guide, let’s review some basics about supplier recognition.

(1) How does ‘supplier recognition’ impact other suppliers? What actual benefit is there to the winning suppliers that would make others covet this position?

Done properly, an annual “best of the best” supplier recognition program raises the bar – constructively - for all suppliers.

Think about it this way: let’s say that you target the identification and selection of a dozen of your suppliers, across all areas of spend, for this annual “best of the best” recognition. For a manufacturing firm, that dozen might ultimately be comprised of 4 direct materials suppliers, 2 logistics suppliers, 3 indirect materials suppliers, and 3 services suppliers.

The winning suppliers all benefit from the positive publicity of your company acknowledging that they are a premier supplier. No advertising spending of their own can match the value of having you, as their customer, publicly endorsing their performance.

That is a prime reason why supplier recognition needs to be a visible event: it awakens all of your current and prospective suppliers to the value of ensuring that you are a delighted customer. And, quite literally, suppliers go out of their way to earn the right – through outstanding performance and value creation – to be “on stage” at next year’s awards ceremony.

(2) What goes into a supplier recognition (program) other than a press release?

Best practices, based on some outstanding events at world-class companies, include the following:
• 1st Day - Evening
– Dinner Reception involving Premier Supplier execs, your corporate and BU execs, and your procurement council
• 2nd Day - Morning
– Business Meeting (max 2 hours) involving Premier Supplier execs, your corporate and BU execs, and your procurement council
– Awards Ceremony (max 45 minutes) including Business Meeting participants, and other invited guests (employees and supplier reps). Videotape the entire Awards ceremony, and provide a copy to each supplier that was recognized.
• 2nd Day – Lunch
– Either: Senior reps of suppliers and your own organization, or everyone who attended Awards Ceremony.
– Optional after lunch: social opportunity / golf.
Afterwards,
• Run a full-page color ad, naming your top suppliers, in at least one magazine
• Communicate to your entire supply base (letter, brochure, press release about the top suppliers, reprint of ad)
• Offer to re-enact a “local awards ceremony” at your supplier’s location for the benefit of its employees
• Evaluate what went well, what could be improved, and modify your checklists for next year to reflect your learnings
This is not a casual undertaking, but as mentioned previously the payback can be significant.

SC
MR