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How do you handle supplier pushback?

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Supplier pushback is a common challenge in supplier sourcing, especially when you are negotiating terms, prices, or deadlines with potential or existing vendors. How you handle it can affect your relationship, reputation, and results. In this article, you will learn some tips and strategies to deal with supplier pushback effectively and professionally.

本文章的要点总结

Open book policy:

Sharing your cost-saving goals and having suppliers share their margin targets fosters transparency. This mutual understanding can break deadlocks and lead to a win-win situation that satisfies both parties.
Know your bottom-line:

If negotiations reach an impasse, it's okay to walk away. Not every supplier is strategic, so focus on those relationships where mutual goals align and pushback can be constructively resolved.

本摘要由 AI 和以下专家提供支持

Varendy Lumbardo

11K++ | SCM | Procurement | PPIC |…
Nicolas Insixiengmay, MCIPS, PMP, LSSBB, CSCP

Procurement Leader, MCIPS | Supply…

1 Understand the reasons

The first step to handle supplier pushback is to understand why it is happening. Is the supplier facing capacity issues, quality problems, market fluctuations, or internal changes? Are they trying to protect their margins, leverage their position, or test your limits? Are they unhappy with your demands, expectations, or communication? By asking open-ended questions, listening actively, and empathizing with their situation, you can uncover the root causes of their resistance and address them accordingly.

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Varendy Lumbardo

11K++ | SCM | Procurement | PPIC | Warehouse | Logistics
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Well if the dead ends come. Like you have target for cost savings. And they also have a target margin. And finally you both stuck. The only way is to done the open book policy. You open your target cost savings. And they open their target margin. At the end of the day. You will get a win win solution. Very effective and efficient methods.

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Ammar K.

Engineer|Learner of Semiconductors|Consultant|BD|Sales|Marketing
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This is the most important step to handle the supplier pushback. Here you need to be smart honest and clear about your expectations from them. Usually, supplier push back comes due to a lack of mutual trust or ambiguous information shared with them.

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Sujay Sinha

Procurement Manager at Lakshya Internet Private Limited
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In majority of cases Suppliers facing capacity issue because sometimes they don't have idea about demands . Reason- having multiple supplier & different quotes confuses selection of supplier usually preference given to lowest offering but this is not the right way of procuring. Treat each supplier equally whether they have unmatched rates/offers. We need to win their trust & to boost their confidence as reliable partners. Open communication is the key ingredients. Conclusion supplier relationship really matters.

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2 Clarify the expectations

The second step to handle supplier pushback is to clarify the expectations and objectives of both parties. What are the key deliverables, milestones, and performance indicators for the project or contract? What are the benefits, risks, and trade-offs for each option or scenario? What are the non-negotiables, priorities, and preferences for each side? By establishing a clear and mutual understanding of the scope, terms, and goals of the agreement, you can reduce ambiguity, confusion, and conflict.

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3 Focus on the value

The third step to handle supplier pushback is to focus on the value and benefits of the collaboration, rather than the price or cost. How can you help the supplier achieve their strategic, operational, or financial objectives? How can you create a win-win situation that enhances the quality, efficiency, or innovation of the solution? How can you demonstrate the value proposition, differentiation, or competitive advantage of your offer? By highlighting the positive outcomes and opportunities of the partnership, you can build trust, rapport, and loyalty.

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4 Negotiate the options

The fourth step to handle supplier pushback is to negotiate the options and alternatives that can satisfy both parties. What are the best-case, worst-case, and realistic-case scenarios for each issue or point of contention? What are the criteria, standards, or benchmarks for evaluating and comparing the options? What are the concessions, incentives, or compromises that can be offered or requested? By exploring the possibilities and trade-offs, you can find a fair and balanced solution that meets the needs and interests of both parties.

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5 Confirm the agreement

The fifth step to handle supplier pushback is to confirm the agreement and document it in writing. What are the main terms, conditions, and clauses of the contract or order? What are the roles, responsibilities, and accountabilities of each party? What are the communication, reporting, and feedback mechanisms for the implementation and evaluation of the agreement? By summarizing and formalizing the agreement, you can ensure alignment, compliance, and transparency.

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6 Maintain the relationship

The sixth and final step to handle supplier pushback is to maintain the relationship and follow up on the progress and performance of the agreement. How can you provide support, guidance, or feedback to the supplier during the execution and delivery of the solution? How can you monitor, measure, or verify the results and outcomes of the agreement? How can you recognize, appreciate, or reward the supplier for their contribution and cooperation? By nurturing the relationship, you can foster mutual respect, satisfaction, and growth.

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Varendy Lumbardo

11K++ | SCM | Procurement | PPIC | Warehouse | Logistics
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Don't ever forget. You and your supplier is equal. So please find a win win solution rather than win lose. Or even worse lose lose solution.

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7 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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Nicolas Insixiengmay, MCIPS, PMP, LSSBB, CSCP

Procurement Leader, MCIPS | Supply Chain expert CSCP | Project Management champion PMP | Agile practitioner PSM | Continuous Improvement believer LSSBB | ESG Advocate | Blockchain enthusiast | AI adopter
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Not all suppliers will be deemed strategic, and that's perfectly acceptable Some supplier relationship will remain purely transactional, and in these instances, it's perfectly fine to rely on metrics centered on costs, quality, delivery instead of over promising long-term relationship or partnerships. Lastly, if the pushback and issues can't be resolved, walking-away from a negotiation is also an acceptable option. There is no point accepting a bad deal that would disadvantage a party. Always know your bottom-line.

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How do you handle supplier pushback?

1

2

3

4

5

6

7

1 Understand the reasons

2 Clarify the expectations

3 Focus on the value

4 Negotiate the options

5 Confirm the agreement

6 Maintain the relationship

7 Here’s what else to consider

Supplier Sourcing

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How do you handle supplier pushback?

1

2

3

4

5

6

7

1 Understand the reasons

2 Clarify the expectations

3 Focus on the value

4 Negotiate the options

5 Confirm the agreement

6 Maintain the relationship

7 Here’s what else to consider

Supplier Sourcing

给文章评分

感谢您的反馈

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