Decideware

Corporate environmental responsibility has come of age.

Companies want to reduce their carbon footprint and they want to see that their suppliers are doing the same.

We recently came across a consulting firm specializing in online sustainability training and sustainability professional certifications, greensupplychain.org and, for example a conference next month in San Francisco, the Sustainable Supply Chain Summit.

Consultants, supply chain heads, government agencies, academics and other informed stakeholders are promoting the need for companies to evaluate the performance of their own, and their suppliers' environmental programs.

This is a timely and obviously important idea and one which should be operationalized in supplier assessment scorecards.

It will be increasingly valuable, from a commercial perspective, to incorporate a set of green focussed assessment metrics into performance scorecards, based on key questions such as:

• Has the supplier implemented a formal green program?

• What is the quality of that program?

• Do we have an open and transparent corporate social responsibilty dialogue with them?

• Does the supplier publish an annual sustainability report?

• How did they perform on key green measures?

• Do they understand our environmental policies and priorities?

• Does the supplier maintain a chemical exclusion list to ensure that their processes are free from environmentally harmful chemicals?

• What is the quality of the suppliers reverse logistics program?

• What is their end-of-life reclamation strategy?

• Do they work with their suppliers to manage better environmental performance?

As environmental issues increasingly impact on the economic climate, I'm sure we'll see a significantly bigger effort placed on managing green supply chains.

And that will, of course require tools and methods which provide greater transparency and communincation between supply chain members.

Author: Derek Groom (Decideware)

CIPSA Supplier Evaluation Training

I recently attended a one day training course in Sydney on Supplier Evaluation.

The course was organized by CIPSA (the Chartered Institute Of Purchasing & Supply Australia & New Zealand) and targeted at supply managers. I was keen to pick up a lesson or two to sharpen my skills in the area of supplier evaluation.

Key Learnings

Some of the key points stressed in the course included:-

• Whether evaluating potential or existing suppliers, it is essential to have in place a robust process

• A basic first step is to identify evaluation criteria - which should form the benchmark against which performance is assessed. Suppliers should always be evaluated against the identified benchmark rather than against each other. It is more important to identify how well suppliers are meeting the identified objectives, rather than how well they are performing against each other

• While cost is likely to be an important evaluation criteria, it should not be the only criteria. As was noted, “If the only tool you have is a hammer then every problem becomes a nail”!

• Evaluation criteria should be prioritized to reflect relative importance

• Ideally, the evaluation criteria used to assess an ongoing supplier should be linked as closely as possible to the evaluation criteria used to select the supplier in the first place

• It is essential to involve key stakeholders within a company when developing evaluation scorecards. It can be useful too to involve suppliers

• Implicit to the whole process of evaluation is that all team members should be involved in the evaluation scoring.

Upgrade your toolkit

If all this looks deceptively simple in theory, it can be more difficult to execute well in practice witihout the right tools.

You may well need purpose-built software to help your team put into practice what the training courses preach!

Author: Derek Groom (Decideware)

In an excellent newsletter that I subscribe to, "Propulsion" by Tim Williams describes a great research technique to "look backwards" from failure in order to identify the issues that currently face a business.

"Account planners have an innovative research technique they call "The Obituary."

In individual interviews or small groups, planners ask consumers, "Let's say this brand just died. Write an obituary for the brand. What did it die of? Who will miss it? Who will come to the funeral?

Respondents are asked to put the brand's obituary in writing. Out of these responses come some fascinating insights about how consumers really feel about brands."

Tim goes on to describe how he applies the technique in his work consulting to agency executives - with a similar objective to help identify issues which can be addressed to help manage better client relationships.

We're familiar with the types of issues I'm sure Tim generates in his work.

Here are some examples of Relationship Obituaries we hear (and you may well have heard these as well)....

From a client:

"The relationship started out with the best of intentions but over time it grew stale. Vendor senior management never attended meetings and we felt isolated and under appreciated. At the end of the contract the business went to out to tender, much to the surprise of the vendor."

...and...

From an agency:

"The client never treated the us as a partner, they failed to share critical brand strategy and as a result the creative was never quite what it should have been."

I think this Obituary technique could be a great way to identify assessment criteria to apply in a formal supplier evaluation process and in particular, it could be focussed to reveal behavioral-based issues.

Behavioral based criteria, for example "information was not shared", and "management did not attend meetings" are much more easily actioned by supplier managers than non-specific issues, for example "there is no trust" or "they don't care about us".

I'm sure skilled researchers could guide respondents to go beyond top-line, non-specific concerns to verbalize specific, behavioral issues which can then be applied in formal evaluation programs.

The benefit of this whole approach is that by projecting into the future to look back to a terminal event (e.g. the death of a client-agency relationship) respondents have an opportunity to raise concerns in a low risk forum (the research setting) in advance of serious problems actually occurring.

So managers then have time to consider the issues, to perhaps gather further information to supplement the qual' work, and then to act to manage risk.

Author: Richard Benyon (Decideware)

With Thanks: "What if the advertising agency died tomorrow? By Tim Williams"