Supplier Relationship Management: The Voice of the Supplier
It's an unfortunate fact of business that no matter how hard we try, there will inevitably be a situation where we end up in conflict or dispute with a supplier. When this happens, it can cause a breakdown not just in relations but also in communications.
The danger here is that if those involved feel devalued, cheated or even threatened, then their natural emotional responses could be detrimental to the business relationship. The supplier’s account manager could be saying what is expected but for all we know, he’s doing it through gritted teeth with the sole aim of getting back at us. If that’s the case, chances are we won’t get what we need or, even worse, the supplier becomes a problem.
When a dispute or conflict arises, you can tell a lot about the true feelings of the parties and their aims for the relationship by how each one behaves. According to Ping (1997), if two businesses are unhappy with each other it is the level to which a party voices the issue that indicates their overall attitude to the relationship.
He put forward three possible responses from which the parties can choose:
- Loyalty - remaining silent;
- Voice - changing objectionable conditions; or
- Neglect - allowing the relationship to deteriorate.
Quite clearly neither the first nor the third options addresses the issue so will end in failure. However, by having a voice, it is possible to air concerns and subsequently discuss how to overcome disputes.
This means that being vocal to raise concerns is an important part of relationship management and a sign of a healthy relationship. If the supplier doesn’t vocalise a concern, it is easy to assume everything is OK, however, it could be that the complete opposite is true, with the supplier avoiding talking about any issues.
As a result, hearing the voice, or conversely listening for its absence, are equally important, particularly if the supplier is of strategic importance to us.
Hearing the voice in a neglect or even loyalty scenario is more difficult than it might seem. Simply asking a supplier to tell us if there is a problem or sending them a health check questionnaire to complete are unlikely to answers you can trust. Unless the supplier knows for certain that they can voice concerns, they may be worried that speaking out could jeopardize any future business.
So how do we get around this? As a first step, we need to measure the relationship in different ways to be able to establish a voice. This could, perhaps, be done through a well-designed Supplier Relationship Survey. Secondly, we also need to create a climate and environment where both parties feel confident using their voice. The best way to do this is through a collaborative approach so that the relationship becomes more important or attractive to the supplier.
Disputes and conflict are more likely to arise where there is no voice. A healthy voice helps to keep a relationship stable, but even then, there may be scenarios where a dispute arises and if it does we need to ensure that we are suitably equipped to deal with it.
This article is adapted from Supplier Relationship Management: Unlocking the Hidden Value in your Supply Base (9780749480134) by Jonathan O'Brien © 2018 and reproduced by permission of Kogan Page Ltd.