How can you manage difficult suppliers?

I have handled multimillion dollars suppliers worldwide: the key aspect is to spend a good amount of time in preparation of the corporate scope, deliverables and SLAs. These are crucial to help acquire the best and optimal suppliers to fit my needs. The second steps would come naturally and more efficiently since the grounds rules of engagement are clearly defined. Depending on the scope and contract size I would assign a dedicated person as the relationship manager with suppliers. Frustrations usually arise when roles and communication channels were not well defined. I also leave room for exceptions handling and problem solving responsibilities escalation.

I say this a lot, but pretend like you are giving directions to Siri. Make your expectations from the vendor so clear. You want it to be their fault if they make a mistake. You don’t want them to be able to pin it back on you and say you didn’t communicate clearly. Clear communicate protects you if things escalate down the road!

Every relationship starts with a happy phase. It may not end that way. Unless the supplier clearly articulates the process, role and outcomes, one should do so before the engagement starts. It means reading through the contract, asking for clarification and agreeing on the final terms and conditions. Clear communication can save relationships rather than taking an end-of-road approach.

In addition to being clear on expectations and scope, it’s equally important to clarify what’s NOT in scope and what is not supported. This helps avoid any misinterpretation of the scope in itself or deliverables. Building relationships with a supplier is a marathon. Big or small, it’s important to treat every deal with a good level of patience and politeness. Being clear is kind, and they go hand in hand.

Politely remind a difficult supplier of the value of your business relationship. Remind the supplier of "what's in for them". Additionally, other than the sale of goods, remind them of other benefits of doing business with you or your company. Tell the difficult supplier that you want to continue this business relationship. Last, as gently and politely as you can, state clearly and firmly what you want and expect to change in order for the business relationship to remain stable and good for all involved. Again, gently and politely tell the supplier what your vision of a "win-win situation" is for this business relationship. If this does not solve the problem, get another supplier.

We can do as much as possible, sometimes beyond to provide client satisfaction. With supplier, we can be patient, understanding and supportive. But at the end of the day, we need to set the line and need to stand by it to protect our business and our clients. We need to ensure monitoring and pre-checking with realistic expectations not based on suppliers promises. Always need to have a back up plan for an emergency case with supplier chains.

Set a precedence at the start of the partnership. Be very clear on the scope of services and the quality of work received. Act immediately to communicate any unsatisfactory work presented and don't hesitate to present the consequences of any deviations in contractual and service-related matters. It doesn't have to be confrontational, but it needs communication and establishing very early so the issues are not prolonged, nor escalated into violations of a contractual or regulatory nature.

This can be hard to do as we generally don't like giving negative feedback if there is an issue. Having a process by which you handle performance issues is helpful here. And clarity is your BEST friend in this situation. Sometimes the issue will be a misunderstanding and sometimes it can go deeper. It's essential to seek to understand and then invite them to work with you to resolve the issue - this assumes positive intent. I would recommend documenting any breaches as well as the follow up actions agreed to rectify the situation from your discussion with the supplier. Multiple or ongoing breaches need to be documented as well. And you need to define when you escalate the matter and to who.

This pretty stems from the scoping of services and ground rules of engagement definition. For example I have had suppliers who are part of affiliates that may attempt to contract other services we won’t need or we may have internally here I set the boundaries very clear to avoid such conflicts of interests. The contracts should include these clauses and I highly recommend that you create a standard template through your legal team for all suppliers. What this achieves is the avoidance of legal loops and you can add a services annex customization for each supplier. This ensures that all your suppliers adhere to the same rules of engagement

Any boundaries you establish don't necessarily need to be based in reality. What I mean is - you can use boundaries to your advantage to gently nudge the other party towards the outcome you ACTUALLY want (this technique, "Anchoring" is discussed in detail in the negotiating book "Never Split the Difference"). Say you want a supplier to guarantee availability of a specific part for you at an amount X - in reality, you can ask for 2X or 3X (an extreme anchor). So when the other party comes in and offers something closer to what they can do, say 1.5X, you get what you want (and then some).

Your subject matter expertise comes into play here. You need to know if the situation really is beyond the control of the supplier or an issue of mismanagement. Sometimes a mutually beneficial change can be found but I would place the onus on the supplier to provide solutions first before you step in to take over.

This is important and here the creation and agreement of SLAs is important to create this negotiation process. I do run customer feedback surveys during the contacts. If standards slip or the markets shift in terms of prices I always enable room to renegotiate the agreements and balance continuity with quality and cost

It's rare that a deadline is set in-stone, or there are serious negative ramifications if a deadline is passed. Be ok with compromising on certain things assuming you'll get something in return of equal value.

Don't get trigger happy - there are lots of customers out there and it's much easier to burn a bridge than it is to build one. Work on solving things amicably before resorting to extreme measures (ie. arbitration). Escalating within the vendor organization (though doing this politely) is within reason and shouldn't be considered extreme.

I learned that the key to managing tough suppliers is not just resolving the current issue, but using that experience to grow and improve. After sorting out a problem or wrapping up a project, I always take time to reflect on what went right and what didn't. I make it a point to ask for feedback from my suppliers and everyone else involved. This helps me understand the deeper causes of issues and how they impacted the process. I then use these insights to refine how I choose, communicate with, and monitor my suppliers. I've also realized the importance of having backup suppliers lined up. This approach has not only smoothed out my supply chain management but has also turned my suppliers into valuable partners in the journey

This is a key to everything in life - regulating your emotions and maintaining neutrality. Make sure you are calm and informationally-prepared before engaging in any discussions that may get heated. If you have difficulty managing your emotions during tense discussions (hey, it happens), consider working through supplier difficulties over email (where you can have time to write, reflect, and have someone else review your response before sending).

Managing suppliers, particularly in high-stakes contracts affecting end-users and ROI, requires a balanced approach. Using my coaching experience, I focus on mindfulness and stress-reduction techniques, consult my support network for diverse perspectives, and engage in physical activities to maintain clarity. Emphasizing patience and persistence, I navigate supplier negotiations effectively, ensuring optimal outcomes for our end-users and maximizing ROI. I keep an eye on end results. Countermeasures and efficiency. When work is more objective it can reduce stressful situations and emotional drain

Business success relies heavily on relationships. And maintaining positive supplier relationships is critical to the success of any project. Finding common ground and drawing the supplier into the bigger picture can go a long way to resolving issues or even avoiding them. Clear and direct communication is required, and this includes listening and understanding what's going on from both sides. Although these may be B2B agreements, they are human-to-human interactions.