R.T.F.M. Really. (A team game idea attached)

RTFM

Mondays are hard days already. Some of them should actually be called Monday Concentrates. Especially when things go not the way you expect them to. Even if you had instructions to avoid all the wrong things.

People rarely read instructions. People fill in original files when you ask them not to. Suppliers submit offers via e-mail when you ask them to use systems. People come unprepared to the meetings even if you send out meeting agenda in advance. People arrive at wrong addresses even if you prepare and send out proper instructions where to come. And they should read the instructions when it is appropriate. Sometimes, that could save a lot of hassle.

I remembered one small game we were given during one of those no-name trainings. I actually forgot everything about the training, except this game. You can use this game to test your teams’ approach to instructions. You can – if appropriate – test your supplier’s attitude to the rules. That will surely indicate in the future whether or not you should expect the unexpected things. efficiency task list

So here it goes: the host hands out a task list and asks to fill it in. It should be a single page, printed on both sides. It would be advisable for the Host to have all the items, mentioned on the sheet, available at the time of the game. Very simple. 50 questions. The one who does is fastest – wins. Where is the trick? The trick is the first and last questions. The first question says: Read the instructions. The last question says Do nothing and return the page to the host. The person who does exactly that – and reads fastest – wins.

Do not get me wrong – I love inventive, creative people. But there is time and place for everything.

Here is the link to the file for the game: RTFM task

Have fun and please share your feedback afterwards!

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R.T.F.M. Really. (A team game idea attached)

So Procurement Is Transparent. And Is That It?

transparency procurement

Hospitality forms. Anti-Bribery acts. Spend policies. Gift policies. Forms and declarations and more reports. Especially popular and famous among people who work in procurement. Has anyone measured, if it works? And if so – how? “Transparency is new green” in procurement, I read. Transparency is a new fashion in strategy. Is that all that it takes to make your business successful?

The Importance Of Attitude

From my own experience – it is more about the intuition and my own attitude. I would never do something to feel committed to a supplier. It does not even matter what it is: asking for tenth set of “free samples”, demanding to take on any sort of unjustified costs… If there is a question on who is paying for the dinner – I would choose not to go at all. One thing is simply being polite and humane. Another – fake political correctness. Imagine a person, who has a will to abuse his/her own company. Do you think hospitality form will stop them? I dare to completely disagree. While if a person is trustworthy – additional forms will only create additional workload and frustration, nothing else.

Is Transparency applicable only to Procurement?

So you have developed five policies, created seven forms for your buyers. Good job! Really well done! I assume, now you feel safe? Think again! It always takes at least two to tango, I bet you heard about that.  I had a dilemma once in my life, while being a commercial director. That is, I was responsible for purchasing and for selling. A prospect customer’s buyer asked for “bonus”. For a commercial director it means guaranteed sales. In big quantities and for quite some time. I went to talk to a commercial director and co-owner of that company. The buyer later on admitted his wrong-doing and was fired; the sales never happened and we lost that client in the long run. Not everyone is like me. What would you do?

Examples from other departments

  • Sales guys issuing fake invoices on the last day of the month and then cancelling them some time into the next month. Nobody likes angry managers at monthly reporting meetings.
  • Managing directors keeping out-of-date and bad quality items in stock, thus trying to keep the value of the inventory – and the company itself, at the same time – way higher than it actually is. Nobody wants to sell a company with a loss (that is, if they would manage to find investors).
  • Retail shops, which from time to time “re-label” the “best before” stickers on some items. Who would want to lose money, right?
  • Road workers, who “save” some tarmac from the roads they are building. And, magically, some newly built private property entrance roads appear next to the main road being fixed. Nobody wants to miss the opportunities.
  • Sales guys, getting “personal incentive” from third parties for reducing the prices lower than company’s official policy.
  • Invisible staff! They are on a budget, on a “head count”, but never appear at work. Rumours – only rumours – sometimes say, they could be close relatives to those who have the hiring decision power.
  • Technical departments, writing product specifications for a single product from a single supplier.
  • Accountancy scandals – which often go very loud. Or people with access to cash money…

I realise, that transparency is important. But it is equally important throughout all departments – not only procurement. Most importantly, a person’s intentions and attitude have to be obvious and appropriate. Then everything else will come as a given.

Thank you for taking the time to read! Please feel free to drop a line with your opinion!

So Procurement Is Transparent. And Is That It?

How Do You Close a Lagoon?

close lagoon

They say – when there’s a will, there’s a way. Do you agree? I think, that even if there is no way at the beginning, but the will is present – you can make the way.

The author of the illustration is Afonso. He is thirteen. We were on a driving and hiking tour one day and it was well into the second half of the day when we approached yet another one of the lagoons to see. After taking five steps towards the road, leading to the lagoon, Afonso stopped and stated, that there is no point to go any further. “Because the lagoon is closed”.

Afonso was a tired teenager. But there and then I remembered tons of tantrums that grown-ups end up having: consciously OR unconsciously. I think the unconscious ones are the ones that keep us from progress. Fear of change, laziness, lack of self-confidence (or, sometimes, over-confidence), lack of trust in other specialists, fear of failure or uncertainty – those are the reasons that stop us all from becoming better, working better, getting better results, to name but a few. Have you heard anything like this?

  • There are no other products (suppliers) like this on the market. Did you do anything to check it? And meant it?
  • We have always done it this way. That one is my favourite. Catherine DeVrye says those are the most expensive seven words in business.
  • Something might go wrong. It won’t work. What if you do nothing? How do you know, that situation, in which you are now, is “right”? And, sometimes, it will go wrong. Sometimes it go wrong many times. Until one day: SURPRISE! – it goes very good!
  • There is not enough time. What about trying to plan?
  • I know best. Yes, of course! Me too! See the guy on the couch? Him too! Also, the lady that just passed by – I bet she knows it best, too! What if we would just make sure, that my “best” matches your “best”? What if we would be open and willing to hear?
  • There is not enough money. Or is it ideas, inventiveness, discipline, will, that is actually missing?
  • We do not have resources / skills. Is it not something you can get – if you really need it?
  • Lagoon is closed. The sign says so – and the sign cannot be wrong, can it?

These and many similar are the things, stopping us from finding another opportunity (to save costs, improve processes, create additional service and/or value to customers). Changing our mindset will open new roads. To see the lagoon, as well.

Another category is the concious ones. To put in simple words – when we lie. With good intentions, with bad intentions. More or less creatively. Many years ago, while still at school, when all the homework was still done with paper and pen, I remember  not bringing mine to the teacher, because “my cat spilled milk accidentally over the notebook”. Unfortunately, the teacher knew my family well enough to know, that we do not have any cats. And then it was too late to change my main character of the story to “my little sister”… Those excuses, however, is a different story. Do you have any of them?

How Do You Close a Lagoon?

The Emperor’s new clothes. Or what does it take to become efficient in procurement.

new emperors clothes

I was listening the other day about the junior doctors’ strike and new contracts in UK. Some time ago I spent two half days at school admission appeal hearings. Everyone is giving their own reasons for rejections, lack of development, lack of motivation to work… While everything ends up with a magic word RESOURCES. Lack of resources. And somehow, at that moment, it starts sounding more like excuses rather than real reasons. Many years ago, we had a discussion with my ex-colleagues in Ireland. We were discussing an article, which was analysing most inventive “real life” survivors. We came up with few conclusions, but the most important was: a will. A will and effort to manage available resources in a best possible way. That is why I would like to ask: what is it that people are actually lacking? Imagination? Inventiveness? Attitude? Or just resources?

Do you know the feeling of wanting to change the world? I do. And, on top of other things, I like to consider myself procurement specialist. Therefore, after hearing, that someone is lacking resources, I decided to have a teeny tiny look (just taking a glance, really) of how they are managing their current resources. We have changed quite a few schools recently – I had some insights from my own experience and this subject was a bit painful for me before. I chose to have a closer look at school uniform prices. I took a secondary school blazer as an example. What was I looking for? Information, to start with. Some insights about efficiency. Patterns, maybe. Attitudes – for sure.

How did I do it? I analysed more than thirty (30) schools, six different suppliers. It was not that difficult and took me just a couple of hours – all the information is available publicly. Please see the graph below shortly indicating the results:

schools 1

I would like to state in advance, that I have no intentions to judge or jump into conclusions. There were few suppliers like the “Y supplier”, quite a few similar to “X” and “Z”. For me, this exercise was a discovery. Again, no conclusions, just questions:

  • How different do the blazers have to be in specifications, to have 151% price difference? That is, buying from the same supplier?
  • How different do they have to be in quality, to justify the difference? By the way, my experience, so far, shows: expensive supplier blazer – worn for 4 months, fixed twice (yup, i can sew – not just write); cheap supplier blazer – worn for 3 months, everything’s fine so far.
  • How efficient is Heatherton School or Claire’s Court school purchasing, if they manage to pay £56 or £50 more than what other school is paying, while buying from the same supplier and seeing all the prices publicly? How difficult is it to check the efficiency and realise, that actually, compared to the market, they could potentially be saving up to 74%? (To be completely honest, people from High Crest Academy, would say that it is overspending. Or resource wasting – you choose. By 288%).
  • If they know about it – what is their attitude towards the pupil’s parents?
  • What are they teaching their kids in terms of value of the products?
  • Where do the kids work and apply the same principles after leaving such schools? NHS? Education? Banking? Who knows?

I understand differences in models, in sizes. I mean – I get it. But three times the difference? I actually found schools, whose full recommended uniform set costs £73, who really have no supplier preferences. And the pattern was quite clear: the suppliers, that have consistently low price, have very small differences among their own products, which really represent specification differences (sizes, models, girls / boys, pockets, etc.). However, the suppliers, which have “differentiated pricing policy”, really take it all the way.

Seeing this, there are way more questions to be answered. Questions, such as: which part or “lack of resource” is really lack of resource? Why is this such a wide practice? It is all official and public – and raises no questions? Is it valid only for “blazer” as such or everything that they buy? Is it applicable only for educational sector or everyone: private, public sector?

Sometimes, all it takes, is just to open your eyes. Stop for a second, drop what you were doing (especially, if it was complaining and wining) breathe and open your eyes. Michael Jackson was singing: “If you want to make the world a better place, take a look at yourself, and then make a change”. Who’s with me?

The Emperor’s new clothes. Or what does it take to become efficient in procurement.

Talkin’ ‘bout You And Me…And The Games People Play

games people play

The Game

My six-year-old learned to flirt. He is lifting his eyebrows, blinking, staring like Puss (the one with the Boots). To keep it short – he tries to manipulate me. And more often than not, he wins.

We, as buyers, get quite a bit of training on how to be successful in what we do. And guess what – sellers get probably at least five times that. Have you ever wondered, what kind of training that is? What kind of skill set are they using in their work? Do you think THEY are NOT using the tricks against YOU? No? Then read on – maybe you will find some interesting clues…

 

The Tricks And How To Deal With Them

 

Focus on making a difference. They are taught to make their products “special” and “better”: “different” from everything else. And that, of course, comes for a price premium. In this situation, you can ask few questions:

  • Do you really need that speciality? Did you need it from the very beginning? Would other suppliers be able to suggest it?
  • Is it really different? Can they give measurable specifications of the difference?

Get your clients to say no. Correct. You might recognize yourself in a situation where you keep on repeating “no’s” and even start even feeling guilty and awkward about it. Therefore, when the next option comes and is somewhat decent, you say “yes”. That does not happen without reason. Break the circle early enough. Play the same card on them – offer options, where all of them are not what supplier wants to hear.

Create an account entry campaign. Sellers are determined. They are told, that it takes 7-10 contacts to crack into a corporate account these days. Many sellers, however, give up after 3-5 attempts. Help them and yourself – publish on your website what is the situation with your contracts: are you (or not) in any searches; maybe – you have just finished signing all the contracts for the rest of five years. And maybe – you are still interested in a list of innovations or “painful” subjects? Make it clear from the start.

Killer questions. The better sellers are taught to open the meeting by asking questions, rather than rushing straight into a sales pitch. What they want to hear is – how do you feel about working with your current supplier? Best sellers will make the buyer convince herself (himself) that it is time for change and, furthermore, the best change option is sitting right in front. Watch how open you become. Sometimes, if the time and the situation is right, and the initiative comes from the buyer – openness can be a good way to go.

Offer fewer choices. Very similar to the previous one. Very often used by retail stores. It is scientifically proven (remember?), that human brain perceives everything relatively. Therefore, if you only have only Small and Large popcorns, people more often will choose small portion. However, if you have Small, Medium and Large and the price gap between Medium and Large is relatively smaller than between Small and Medium, people will switch to buying Large, skipping the Medium at all. Most famous quote in this category is Henry Ford and his phrase “you can have any colour as long as it is black”, when he was talking about his T model. My way of coping these situations – measure, measure and measure again; buy only what you really need. Or quit the game, if you feel like being played.

Playing good cop bad cop and all of the other similar strategies. Whenever you recognize a situation, where decision making person “is not available”, where the person in front of you is willing to give you the discount (or would accept any other offer from you), but “that guy” will never allow it – just challenge it. To avoid similar games, I like to inform my partners in advance what kind of questions need to be addressed during the meeting or even before it. So that all required information is there, so that people concerned could be present or would have had the chance to speak – should they wish to do so, so that there would be no chances for surprises or further delays of addressing the question. If the situation happens anyway – be sure that I score them very low on my attitude evaluation scorecard (https://futureproofitable.com/2016/02/01/dark-matter-in-procurement/).

Make it win-win and Make them think you’re a martyr. They are trained to detect “pain spots”. When they can’t do that – they have skills to “create” one. And then, of course, sell their product as a solution to “your problem”.  Also, they are trained, that their buyer needs to feel they’re getting fantastic deal. Now and again I meet suppliers, who really play “the sacrifice” game: by pitching their price higher than you expect to pay, and gradually allow you to bargain down – but they only give ground when you do. “Well, I wouldn’t normally, but…” Sounds familiar?  They might ask you if you’d want their product if price wasn’t an issue. The moment you say “yes”, they consider you “sorted”. The rest is only a matter of finding the least painful price you are willing to pay.

It has become easier to expect the deals to be fairer nowadays, no matter how tough the sales negotiator and how soft buyer’s negotiator is. Now, when communications are so easy and wide spread, it takes few seconds to create a lot of problems to any business. Feedback, referrals, reputation is something that has a real value to it. A very strong sales person might convince you to buy something you don’t really need once. Will you return again? Most likely not. How hard will it be for you to share thought online? Not hard at all…

Under promise and over deliver. Knowingly. Yup – another name to it is “managing expectations”. Yes, they sometimes may know that the delivery will be available on or just before your preferred time. Yes, they might say they will need one or two additional days and then eventually make it exactly when you wanted it! Ta-dah! Ok, it is not always done deliberately. Oh, it already happened three times in a row? Well, that should get you thinking.

Use NLP (Neuro Linguistic Programming). “I agree you’re thinking like that.” You can find a lot of that on YouTube and everywhere else. Interestingly enough, when I tried to google “NLP for buyers” (and all similar versions), I found nothing decent. When at the same time, sellers are using the whole army of tools:

  • awareness of body language (their own and yours);
  • awareness of intonation (their own and yours);
  • use of time-related grammar;
  • modal verbs / modal operators (would, should, could, etc.) and how they affect your thinking;
  • embedded commands;
  • embedded questions;
  • rapport building;
  • pacing and leading;
  • awareness of emotional state and how to keep hold of that state…

Watch their feet. They are taught to observe your body language. A lot. They know what you are thinking, before you even start talking. Your crossed arms, your eyes, face, shoulders, and legs – everything gives them the clues. Can buyers use the same weapons? Sure! I ask questions while the other part is giving their pitch. They might know their story by heart, they might have even practised it many times in front of the mirror, but they will really be more vulnerable and will show their real reaction and emotions, when they are talking about unexpected things. Are they looking right or left? If they are looking right (your left) – they are more likely to be lying. Left – higher chances of telling the truth (reverse is for left-handed people).

Magic Words, NLP. People associate words with emotions. Words such as easily, naturally, unlimited, aware, realize, beyond, before, after, now, new, because, freely, expand, how to, discover, scientifically proven, research, powerful and amazing can be used in almost any scenario. Word “because”, according to other NLP source, is the one that makes people buy. “BECAUSE this freely solves your challenge in a scientifically proven way”. Who wouldn’t want that??? Want to induce positive emotions? Use: believe, change, energize, healthy, overcome, thrive, success, refresh and happy. Want to make someone interested? Use: finally, revealed, truth, imagine, expose, secret, uncover and illegal. Would like to make someone to take actions? Try these: urgent, easy, simple, limited time and tested. If you catch someone using proven, guaranteed and leading too many times in one paragraph – they want you to gain trust, according to NLP HypnoCopy. Do you still remember one of the first words of this article that caught Your attention?

Attitude. Understand that you don’t have to make everyone happy. 80/20 is valid every time, everywhere. In sales too. 80 percent of their commission comes from 20 percent of their clients. It is only natural, that 80 percent of their customers are getting less attention. So, next time, when you realise, that you are simply not their priority – good luck with getting first class service…free of charge.

 

Thank you for reading! I believe, you found interesting and revealing thoughts. Should you have any comments – simply type few words below!

 

Talkin’ ‘bout You And Me…And The Games People Play

P-P-P-Procurement Face

poker face 3

Do you play poker? Any of it? I am not a very strong poker player. In fact, I have played it several times only. Enough though, to know that there is more than just Texas Hold’Em and that you play completely different if you play only with one player, compared to a big table. Not being strong enough is probably the reason why I enjoy watching the game. I like numbers and psychology behind the game.

Just like in any other aspect of life, I study and learn. If there are people, if some of them are better than others, then there are definitely patterns, rules, strategies…winners and losers, too. Are procurement specialists restricted to learn only from other procurement specialists? No. Will any new ideas come from the same pool of thoughts, in which you have been swimming for the last ten or more years? Most likely, not. I chose to search for lessons everywhere. Including poker.

Let’s check some basic tips and rules for Poker beginners from the vast oceans of internet knowledge…

Don’t Play Every Hand. It suggests, that by doing so, you will just waste your resources very fast. There can be a lot of (procurement) management interpretations for that: start any activity (RFI, RFP, tendering) only if you know the time is right and there is sense (business sense) to do so. You could also learn about the importance of supplier short-listing. Pareto is probably right 80% of the time. In poker, folding is not always bad. In procurement (or life) not taking up an activity which, quite clearly, will not bring any use, is actually the right thing to do.

Don’t Stay in a Hand Just Because You’re in It. Fold if you can’t win. There are times in our jobs, when we have to admit, that the direction we took, is not getting us anywhere. And you might be already half-way through the process. There are times in our lives (fine, mine, “only” mine), when you have to turn back home, being half-way to work, because you left your laptop at home and there is not much working at work without one…

Observe Your Opponents. Even when you’re not involved in a hand you should carefully watch your opponents. This is when you start gathering the real insights about the market and the players in the marketplace – suppliers. This is when you learn about the real needs and motivations. Already signed a deal for FM? That cannot stop you from being curious what your neighbours (industry neighbours) are using… at the time of renewal, you might realise, that from being dominant service provider in area they gave all their positions to new suppliers. Or just the opposite: deal with you would open the door for them into a new market and they are willing to pay for in shape of discounts? Someone else is developing software and is hiring test managers? Linking their rates to the success of testing? Developing KPIs to measure effectiveness and speed of defect managers?

Don’t Play above Your Limits. You are not taking your Boeing to go shopping to Co-op around the corner, are you? Over specification is really one of the most expensive luxuries in procurement.

Keep Bluffing to a Minimum. Bluffing in poker is a major part of the game. But even there, you need to know when, how, against whom to bluff. The main advice, however, is to focus on making the best and most appropriate bets with your cards. In procurement, I would say, we should firstly focus on doing our homework properly and only then (if there is such a temptation) to try and lure our opponent into making a mistake. On the other hand, being able to recognize bluffing might turn out to be a very useful skill!

Learn the Importance of Position. In poker, the position at the table is very important. Dealer (the one that gets to make a move last at the table) is always in the best position. There is no any obvious position at the negotiation table or in procurement table, but if you get your opponent to disclose his / her position first, you will have a slight advantage. Knowing, what you want to say and / or achieve, you can slightly adjust your arguments. It might turn out eventually, that hearing out the other side first, will prevent any confrontation from happening at all.

And the last one – my favourite – Be a humble winner and a graceful loserNo one likes to play with a show-off, or a sore loser. Maintain a good ATTITUDE, and have fun. Or else, you might find yourself being very lonely in your sand box – tender, where only 5% of invited suppliers confirm their participation.

P-P-P-Procurement Face

Dark Matter in Procurement? (Approach evaluation template added)

Dark matter

The phenomenon

There is always more to everything than just best practices and tables and formulas. How else then would you explain the phenomenon, when company has a tool to define a category strategy in 77 slides (when still empty), spend two years analysing that category and eventually result is… no actions whatsoever? Do you think, having even more tables and tools guarantees the best deal in the world? Public procurement is very highly regulated, analysed, observed… Does it make it the most effective in the world? What is the ingredient, which unites previously mentioned and many other situations? It is there, everyone talks about it, but you cannot touch it. Everyone knows, that having all the certificates in the world does not guarantee full and complete success. Or lack of poor performance. It can as well mean nothing, if they are only put on the shelf to gather dust.

There may be many different names to it. Some call it motivation and in a way they might be right. I personally prefer calling that dark matter “an attitude”. Does it apply specifically to procurement? The answer is also very simple – of course, not. It applies everywhere. Everywhere and anywhere, where there are any people involved.

Meaning To The Buying Organization

Have you ever had to deal with corporate world giants, to whom, your business might not be interesting at all? Have you ever tried dealing with indifferent person? How about dealing with indifferent sales agent of uninterested company on Saturday morning, when your whole year’s contract might depend on whether the person picks up the phone? Such situations are real. More so, when creating your risk plan, these are situations you should be preparing for.

Another sample situation: you have checked potential supplier’s financial documents, legal documents, quality documents… They provided more than you asked for and they get a contract. But as soon as that happens, when it comes to serving your business on a routine day-to-day business, you start experiencing more and more unplanned costs:

  • They start changing payment conditions.
  • They start adjusting delivery conditions.
  • They delay accepting and approving purchasing orders.
  • They start changing Bills Of Materials (recipes, ingredients, technology) without informing you.
  • They avoid business transparency and shift their profits to “added charges” (transportations, handling fees, delays, etc.).

These and many other can cause damage and costs to the business. To any side of the business: buying organization, which is not open about its intentions and / or plans, might end up causing losses to the seller. Selling company might waste time, resources (in shape of samples, travelling expenses, even capital investment) and end up not getting the business. The same is true to the buying organisation: poor quality, delayed deliveries, lost sales, lost market – you name it.

Signs of the phenomenon

Try drawing Ishikawa diagram for any of widely known not so “beautiful” stories. Take TESCO’s behaviour with its suppliers. Take modern world slavery. Take any corporate bullying situation. Is it possible, that those situations have a common denominator?

That dark matter is something that creates long-term equilibrium in any relationships. Take supply and demand model as an example. There might be various artificially created or constrained situations, when the common law does not apply, but in the long term, the market is self-regulating. The same applies to buy-sell situations: in a short term, the negotiator of any side might have achieved, presumably, good results. But only the attitude of everyone involved will define, whether or not these results will be sustainable in the long run. Some examples:

  • Poor management / company culture resulting in high staff turnover. When your account manager changes every six months and the new person has to waste another three months of everyone’s time to at least start getting into the rhythm of proper cooperation, it always means costs and disruptions.
  • Poor management / company culture resulting in double standards in quality systems. A lot of things can go wrong here.
  • Poor communication (or unwillingness to even engage into the process, to listen) finishing with many misunderstandings and conflicts.
  • Poor time management, starting another closed circuit – lengthy meetings, non-efficient time using, demotivated and de-focused staff.

A lot of the things might have different names. Many times you could try blaming “company culture” or “environmental culture”. That phenomenon does not create itself. It all starts with people. And there is always a reason – we might simply not know it. We can observe signs, indications, and symptoms. We can analyse and try to interpret what they might mean to the “us” side of the table. Most importantly, we have to acknowledge them and admit, that those things are not going away. We cannot base business decisions only on hope. Hope that things will work out or go away. At least not in the situations, where we can do something about it.

Identifying and evaluating the approach

Have you ever wondered, how can you put into numbers supplier’s unwillingness to work with you? Where, on the “supplier audit scorecard” do you put all “accidentally deleted e-mails”?

I heard about this for the first time while preparing for one of the supplier audits. The search on Google suggested Norman Black’s “5 minute rule”. Some of it, in a way, is described in Kraljic’s Buyer / Supplier perception model. I did not start using approach audit immediately. Some time has passed. Some experience crept in with time. Experience from many perspectives: buyer, seller, project manager.  Now “approach audit” has become a part of any supplier relationship management system that I build.

How much is it important for you? Answering next question might help find the answer. How much of risk are you willing to take? Up to each and every one of us to decide. For me that one part of traditionally five parts of supplier evaluation usually takes from 10% anywhere to 30% of the overall score.

Who do I observe? I observe the company: company’s official claims and how do they apply in reality. I also separately observe key account person (if possible – key person in the business / factory: MD, CEO…) to analyse, where and what is the root cause. Is it possible to escalate, if needed? Or does it come from the very top and changing small parts would mean too much of a hassle to even start anything in the first place?

What do I observe while evaluating the approach?

  • Ease of arranging meeting (Is there a feeling of avoiding the meeting? Rescheduling several times? Why? Was it availability of your account person? Was it because of other staff availability? Did you get any explanations?)
  • Proactive preparation for the meeting (Approach to handling their own and your time: agenda / meeting information provided in advance? Materials for the meeting?)
  • Capacity usage (personal availability for the key contact person). Does the company (factory) work round-the-clock? Two shifts? Do they have any capacity for you? Getting your business will bring benefits or cause problems? If your key person is already overloaded – who will make sure he/she will have time for your business’ needs?
  • Loading / unloading bay’s conditions: real quality is when you do what you do at the same level no matter if anyone is watching or not. If “visitor routes” are vastly different from “staff only” areas – expect double standards in everything.
  • Company’s backyard condition: questions to company: “does it look like a rule or exception?”; a question to the lead person: “does he/she seem surprised? Did he/she know?”
  • How do company staff look like in general (saying hello’s, smiling, etc.). Money can’t buy happiness, right? Are the smiles on the staff faces fake? Did you hear anyone laughing during your visit? Did you meet anyone during your visit at all? Do they enjoy their jobs?
  • Guest parking area. Does it exist? Are there any company staff company cars in those places? Approach and respect from company to its guests as well as staff’s respect to company’s values.
  • Meeting material. Question one was “was it prepared”? Again, in addition to everything else: did they print 20 copies of 20 slide presentations? Single sided? Do they say they are “green”? Do you believe it?
  • Customer awareness. Did key account person know your needs? At least assumptions? Was there any preparation for the meeting done? Did other participants have the same knowledge: were they briefed or were they genuinely interested?
  • General business etiquette: behaviour with the phone during the meeting, for instance. Were everyone in their phones? Key account person?
  • Use of special sales tricks, NLP and so on. Especially, poorly performed and thus identified.
  • Avoiding decisions, situations, taking on responsibilities.
  • Not reading instructions, trying to by-pass rules, applied to everyone in the game.
  • Body language. If I can, I observe as many people as possible to understand how many of them are feeling uncomfortable with information being given. I ask questions while the other part is giving their pitch: they might know their story by heart, they might have practiced it many times in front of the mirror, but they will really be more vulnerable and will show their real reaction and emotions, when they are talking about unexpected things. Are they looking right or left? If they are looking right (your left) – they are more likely to be lying. Left – higher chances of telling the truth (reverse is for left-handed people).

There might be many other factors added to it. Business changes very fast these days. The company might not be able to get all the certificates required, but their willingness and determination to do so has value. Or maybe, their ability to meet and exceed all the required standards without any special external motivation factors is even better?

Thank you for reading! If you have any questions – please simply let me know. I am sharing a small template here to help you all have a small glimpse into the gap between reality and declarations. Approach evaluation

Dark Matter in Procurement? (Approach evaluation template added)