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What are the best techniques for managing a supplier who is not meeting your expectations?

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If you are involved in contract negotiation, you know how important it is to have a reliable and responsive supplier. However, sometimes you may encounter a situation where your supplier is not meeting your expectations, whether it is in terms of quality, delivery, communication, or price. How can you manage this issue effectively and maintain a positive relationship with your supplier? In this article, we will share some of the best techniques for managing a supplier who is not meeting your expectations, based on our experience and expertise in contract negotiation.

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Patricia Ruiz Madue?o

Aporto soluciones a uno de los grandes problemas del sector agrícola espa?ol, la falta de mano de obra | Marketing y…

1 Identify the problem

The first step is to identify the problem clearly and objectively. What is the gap between your expectations and the supplier's performance? How does it affect your business goals and customer satisfaction? How often and how severe is the problem? You need to have a clear understanding of the problem and its impact before you can address it with your supplier.

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Paul (UK) Meadowcroft

Buyer / Expeditor BAE Systems
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Get comparison quotes and let the supplier know what you are doing that usually helps to get them more focused on what they are actually doing and keeps them more focused on their supply of goods to meet our requirements

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Patricia Ruiz Madue?o

Aporto soluciones a uno de los grandes problemas del sector agrícola espa?ol, la falta de mano de obra | Marketing y Ventas como herramientas para el éxito profesional | Deslenguada y educada a partes iguales
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Para poder identificar el problema es necesario que, antes de haber llegado a un acuerdo comercial, se hayan sentado las bases del mismo, así como un control de rendimiento pactado con el proveedor. Gracias al dise?o de un modelo de colaboración basado en indicadores de rendimiento, la identificación del problema se verá facilitada por el lado del cliente y le es muy eficiente al proveedor para analizar si está cumpliendo con su desempe?o. Es importante que todas las aristas de la colaboración hayan sido reflejadas en un marco de colaboración mutua y que todos los posibles flecos de futuros conflictos se hayan resuelto antes de llegar a un acuerdo. Información fácil, clara y medible para ambas partes.

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Daniella S.

Freelance Data Protection Consultant| Data Protection & Privacy Compliance | GDPR & Global Regulations | Data Processing Agreements| Training
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You must understand why the supplier is not able to comply with its contractual obligations. Sometimes it's due to a force majeure event or supply chain disruptions. You might have enough safety stock to cover this period of non supply so you can find a solution that works for both parties. In other cases a service provider may not be aware that you are not satisfied with the services. You need to document orally and then in writing your concerns and ask for a written response by a fixed date. If things go sour and you need to take legal action for breach of contract then you may need to show the initial steps you took to reach an amicable solution. Any cldeviations from the contract e.g late delivery should be discussed with your legal

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2 Communicate the problem

The next step is to communicate the problem to your supplier in a respectful and constructive way. You should avoid blaming, accusing, or threatening your supplier, as this will only damage the relationship and create defensiveness. Instead, you should use factual evidence, such as data, feedback, or contract terms, to explain the problem and its consequences. You should also express your appreciation for the supplier's efforts and achievements, and acknowledge any challenges or difficulties they may be facing.

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Patricia Ruiz Madue?o

Aporto soluciones a uno de los grandes problemas del sector agrícola espa?ol, la falta de mano de obra | Marketing y Ventas como herramientas para el éxito profesional | Deslenguada y educada a partes iguales
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Algunas ideas que pueden facilitar la comunicación de un problema de este tipo: - Construcción de un sistema de comunicación constante entre ambas partes, para mantener una fluidez en la relación, lo que restará tensión ante una comunicación más compleja. - Selecciona desde el inicio a un perfil facilitador de la gestión y la comunicación que sea capaz de sembrar una buena relación, para que la comunicación sea fluida, incluidos los momentos en los que la comunicación se centre en un problema a solucionar. - Aprovecha los espacios donde se ponen en común los resultados de la colaboración. Es un buen momento para analizar la situación y comunicar que los resultados esperados no se están terminando de alcanzar.

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Elisabeth (Else) Lekkerkerker

Senior International Procurement Manager
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The best way in my experience is to not just communicate the problem, but also find out the reason for their lack of performance.

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Daniella S.

Freelance Data Protection Consultant| Data Protection & Privacy Compliance | GDPR & Global Regulations | Data Processing Agreements| Training
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If liquidated damages are a contractual remedy calculate and communicate that you have no choice but to apply it to your next payment.

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3 Negotiate a solution

The third step is to negotiate a solution that works for both parties. You should aim for a win-win outcome, where both you and your supplier benefit from the resolution of the problem. You should also be flexible and creative, and explore different options and alternatives that can address the problem. For example, you may offer incentives, such as discounts, referrals, or testimonials, for improved performance, or request concessions, such as refunds, replacements, or extensions, for poor performance. You should also set clear and realistic goals, timelines, and measures for the solution, and document them in writing.

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4 Monitor the progress

The fourth step is to monitor the progress of the solution and provide feedback to your supplier. You should track the performance indicators and outcomes that you agreed on, and communicate regularly with your supplier to review the results and address any issues or concerns. You should also recognize and reward your supplier for any improvements or achievements, and show your support and collaboration. This will help to build trust and rapport with your supplier, and motivate them to continue to meet your expectations.

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Patricia Ruiz Madue?o

Aporto soluciones a uno de los grandes problemas del sector agrícola espa?ol, la falta de mano de obra | Marketing y Ventas como herramientas para el éxito profesional | Deslenguada y educada a partes iguales
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Para evitar llegar a la situación de conflicto: - Ofrece a tu distribuidor un sistema de seguimiento al que someterse, con el que se pueda sentir cómodo, incluso hacerlo partícipe del mismo. - Identifica todos los aspectos susceptibles de ser medidos para a?adirlos dentro del sistema. - ?Hay fechas relevantes a tener en cuenta? Cuenta con ellas en la planificación. - Propón revisiones en espacios cortos de tiempo para los KPIS intermedios y revisiones de objetivos más generales en espacios algo más distanciados en el tiempo. - Involucra a los principales stakeholders del proyecto y hazlos partícipes del progreso de la relación, así tendrás un mayor control de la operación. - Apóyate en tecnología para eficientar el proceso.

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5 Evaluate the relationship

The final step is to evaluate the relationship with your supplier and decide whether to continue, modify, or terminate it. You should consider the overall value and satisfaction that your supplier provides, as well as the costs and risks of changing suppliers. You should also solicit feedback from your supplier on how they perceive the relationship and how they think it can be improved. You should then communicate your decision to your supplier and explain the reasons and implications. If you decide to continue the relationship, you should reaffirm your commitment and expectations. If you decide to modify or terminate the relationship, you should negotiate the terms and conditions of the change and ensure a smooth transition.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Daniella S.

Freelance Data Protection Consultant| Data Protection & Privacy Compliance | GDPR & Global Regulations | Data Processing Agreements| Training
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You should look at the contractual options to suspend or terminate the agreement in case those options are required. You should look to alternative suppliers who can meet your needs even for an interim period.

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What are the best techniques for managing a supplier who is not meeting your expectations?

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2

3

4

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6

1 Identify the problem

2 Communicate the problem

3 Negotiate a solution

4 Monitor the progress

5 Evaluate the relationship

6 Here’s what else to consider

Contract Negotiation

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What are the best techniques for managing a supplier who is not meeting your expectations?

1

2

3

4

5

6

1 Identify the problem

2 Communicate the problem

3 Negotiate a solution

4 Monitor the progress

5 Evaluate the relationship

6 Here’s what else to consider

Contract Negotiation

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