SRM and Supplier Recognition - III

What are the reasons in favor of Supplier Recognition (an annual event in which your “best of the best” suppliers are publicly acknowledged and thanked, often followed by a press release naming those top suppliers)?

There are several:

·        It demonstrates to your supply base that you are serious about rewarding excellent performance

·        It can raise the bar for your entire supply base, once they understand how they benefit from your public recognition

·        It demonstrates to your own organization that it’s not just the negotiated deal that counts, it’s how well the supplier (and you) perform after the deal that matters

·        It involves your internal clients/users in assessing and actively managing the supply base

·        Done well, it can energize your supply base and generate a significant return on investment

There are also some issues to be aware of:

·        It requires leadership, effective project management, and commitment from top management

·        It requires a budget

·        It has a long lead time for the first year (often 9 – 12 months)

·        It can subject you to behind-the-scenes criticism if an annual supplier recognition event is inconsistent with how you manage and treat your suppliers during the year

More on this topic in the near future.