Decision-makers in organisations should be meeting their suppliers regularly to review their performance in meeting their requirements. Whether things are going well or not, suppliers need to be actively managed to drive high performance. Unless contract managers are holding supplier review meetings with structured plans and goals, they are simply crossing their fingers and hoping that suppliers will deliver a strong performance.
“A goal without a plan, is just a wish.”
Antoine de St Exupéry
Preparation is key to managing these meetings well. The meetings should fall in under the procurement and category strategies for the organisation. Furthermore, the contract agreed with the supplier should contain the essential element of what is to be reviewed. It should focus on the recent past, the present and what is foreseeable in terms of requirements over the next contract term.
Ultimately, running supplier review meetings well is an essential part of managing the relationships between a company and its suppliers. Supplier review meetings provide an opportunity for both parties to discuss performance, identify areas for improvement, and develop strategies for maintaining a strong partnership. In the rest of this article, we will outline some best practices for running effective supplier review meetings.
1. Set clear objectives
Before the meeting, establish clear objectives and communicate them to the supplier. This ensures both parties are aligned on what they hope to achieve during the review. Objectives can include discussing performance metrics, identifying opportunities for improvement, and setting goals for the next review period.
2. Prepare thoroughly
Take the time to gather data and prepare materials for the review. This might include performance reports, supplier contracts, and notes from previous meetings. By being prepared, you will be able to guide the conversation and ensure that all important topics are covered and link back to the contract, and the various parts of the category strategy and procurement strategy.
3. Schedule in advance:
Schedule the meeting well in advance and provide the supplier with plenty of notice. This will allow them to prepare adequately and ensure that key stakeholders are available to attend. If a supplier isn’t prepared, you have a stronger basis for challenging them if they have had adequate notice to prepare.
4. Create an agenda
A clear agenda is essential for ensuring that the meeting stays on track and all important topics are covered. Share the agenda with the supplier in advance so they can come prepared to discuss each item. Be sure to allocate adequate time for each agenda item and stick to the schedule as much as possible. We believe the agenda should be structured and have a recurring spine that includes reviewing the contract performance (KPIs and SLAs), the scope of delivery, any new requirements, and risk & issue management.
5. Encourage two-way dialogue
The supplier review meeting should be a two-way conversation, not a lecture. The contract managers should encourage the supplier to share their perspectives and ideas for improvement. This helps to foster a collaborative partnership and ensure that both parties are committed to driving positive change.
6. Focus on data-driven insights
Use data and metrics to guide the conversation and identify areas for improvement. This might include performance metrics such as on-time delivery, quality metrics, or customer satisfaction scores. By using data, you can have a more objective conversation and avoid subjective opinions or emotions.
7. Be honest and transparent
Be honest about any issues or concerns you have with the supplier’s performance. It’s better to address these issues directly rather than letting them fester and damage the relationship. At the same time, be transparent about your own performance and areas where you can improve.
8. Set action items
At the end of the meeting, identify specific action items and assign responsibilities for each item. Contact the supplier regularly and ensure progress is made.
9. Follow up regularly
Don’t wait until the next review period to touch base with the supplier. At regular check-ins, make sure agreed actions are addressed. At these meetings, you can also address any new issues that arise. Depending on the nature of the supplier, these could be weekly, fortnightly or monthly.
10. Continuously improve
Supplier review meetings should be a continuous improvement process. Use feedback from previous meetings to identify areas where you can improve your own performance and strengthen the partnership with the supplier. This is a great way of identifying and unlocking additional value from suppliers.
In conclusion, running effective supplier review meetings is critical for maintaining strong relationships with suppliers and driving continuous improvement. There is a reason why large private and public sector organisations use supplier relationship management techniques – they work and deliver value for both parties over the short, medium and long-term.
Find out more
For more on supplier management, you check CIPS here or additional keystone procurement articles here.
