How satisfied are you with your supplier?

Services are difficult to visualize, but are an important component of supplier value. Three-time US "purchase" magazine "purchase gold" winner, the late IBM chief procurement officer Richter summed up the experience of a lifetime, one thing is to affirm the value of supplier services. Services are invisible in price, but not invisible in value. For example, the same supplier, one has the design ability, can make rationalization proposal to the purchaser's design; the other can only according to the drawing processing, which value is big, self-evident. But the value of services is hard to quantify. This requires professional judgment and overall consideration, the quality of supplier managers put forward higher requirements.

For local companies, customer expectations for service will be higher as manufacturing upgrades. In other words, what appears to be a manufacturing upgrade is actually more of a service upgrade; the more sophisticated the product, the better the service. It's like eating a sandwich at a fast-food restaurant on the street for $5, and at a five-star hotel for $50. It's not the quality of the Sandwich -- The quality of the sandwich is often not as good as the fast-food restaurant; it's the service. With the increase of consumer's income, the expectation of service will be higher and higher, and the differential advantage of service to enterprises will be more and more obvious.

Interestingly, in extreme cost-oriented enterprises, service is often criticized. Walmart, for example, and Chinese restaurants in Silicon Valley -- cheap is cheap enough, and the service is bad enough. United Airlines is another example: I use Google to read English News, and when I turn on the mobile version of Google, there is always negative news about united, such as hitting a customer again, forcing a passenger's baby to sit in a dangerous place Torturing passengers'pets. It's simple. You get what you pay for, or you get what you pay for. What kind of service do you expect from a united ticket that is so cheap?

It's like when I go to a star restaurant and order a sandwich, I pick and choose, even giving the waiter a dirty look. But when I go to a fast food restaurant on the street, I have to be careful with every word I say to the hostess and feel guilty about every question I ask Because I knew that a $5 Sandwich meant that the hostess only gave me half a second of service. The hostess was already looking at me impatiently. I had to bow down and back away.

You can understand now why I have to be deferential to the old wives of United Airlines: I paid the least money for the cheapest United Airlines and certainly couldn't expect good service It's only natural to be angry with those sad faces. There are, of course, exceptions, such as when I met a very nice united flight attendant on a flight from the Mexican resort of Cancun to San Francisco (where, of course, I was berated by another sour-faced American) . But it's one of the few things you can buy on Ebay for the least amount of money.

With all this going on, what I want to really say is this: In the long run, what really differentiates the quality and service you get is the price you pay. You know, you don't always get good quality and service by paying high prices; you get bad service by paying the lowest price. Or, at the lowest price, you may occasionally get good service, but in the long run, you're bound to get bad service. You See, a business can not operate on chance; it always does business on necessity. This also destines, the lowest price guides, what you sacrifice certainly is the service and the quality.

And it's based on my years of experience flying united. I've never had a soft spot for united -- I can't think of a worse airline in the U.S. service industry, but they're often the cheapest to fly from Silicon Valley to the states, so I choose them It also means choosing the face of a flight attendant (especially a bad one on a Chinese flight) . After flying one hundred thousand miles and circling the globe, I finally realized that if you fly the cheapest United Airlines, you'll probably get it, and to change that, you'll have to pay more and fly better. Although pay more money, flight attendants or sometimes give you a look, but after all a penny a goods, the overall quality of service up. So united was on my hit list.

So, without further ADO,. Service is invisible, in different companies, industry focus will also be different. But the common denominator is that services involve people and can be measured by user satisfaction -- we can still be reasonably accurate in determining the level of service provided we survey the right people and ask the right questions. For example, the company expects suppliers to make reasonable recommendations to designers, shorten delivery times for new products, actively cooperate with quality staff in quality investigations, actively cooperate with procurement staff in scheduling and expediting orders Then the company can send a short questionnaire to the relevant personnel, survey their satisfaction with the above, and what needs to be improved. More people count, and the results are representative. What's more, suppliers are getting the signal that the company is counting on the quality of their service, and that anyone's opinion matters. This would avoid as much as possible the phenomenon of a supplier being driven only by the competent authority.

How satisfied are you with this supplier?

A company has a supplier that mainly provides testing services to the buyer's engineers, buyers, quality management personnel and so on. The service range is wide, the service content is complex, because each person's testing requirements may be different. In recent quarters, the company has been doing more and more business with the supplier, and the purchasing manager hears complaints from internal customers from time to time. So he developed a questionnaire, a few simple questions, which took roughly two minutes to complete Send it to internal customers who deal with the supplier frequently, and have each of them rate the supplier.

On a scale of 1 to 55-very favorable; 1-very unfavorable

1. The supplier is quick to respond to my requirements (such as timely response, tracking orders) 

2. The supplier has a robust process to ensure quality of service

3. The supplier is flexible and willing to change according to my requirements (E. G. , rush work) 

4. The delivery cycle of the supplier is reasonable

5. The supplier is willing to help me when I have an urgent need

6. The supplier's rush fee is reasonable

7. On the whole, I am satisfied with the service of this supplier

Figure 77: Are you satisfied with the vendor's performance?

Here are the results of both surveys. In quarterly meetings with this supplier, the purchasing manager reports to the supplier and senior purchasing supervisor. This sends many signals to suppliers:

Signal 1: What matters to the buyer. Response Time and lead time are important because engineers develop new products and need to get test results quickly, and quality people need to get test results as quickly as possible in order to judge product quality. Many of them complain that they have to wait half a day or a day to get a response to an email sent to a supplier, or that they are always busy with phone calls. Flexibility is high, because the buyer's test requirements change, today decided to test this, tomorrow changed, decided to test another. It was supposed to take three days, but the client's request suddenly changed and they wanted it the next day. Therefore, the supplier must be able to respond promptly, is willing to change according to the demand change. To ensure this, the supplier can not rely on only a few key employees, there must be a sound internal process, whether it is receiving orders, testing, delivery, or after-sales service. Unfortunately, sound processes are often not available to small vendors.

Signal 2: The buyer is scoring. It's like playing basketball. If you don't keep score, the two teams just play around and get lazy. Once you start keeping score, you get serious. "sub-sub-sub, the magic weapon of teachers, the lifeblood of students, " on supplier management, or the whole supply chain management, the same reason. The score must have the standard, can guide the supplier to move toward the standard. For example, the purchaser expects the supplier to respond within two hours of receiving the information, a dedicated person is responsible for tracking the order, the delivery time can not exceed three days, if one day in advance, the catch-up fee can not exceed 20% , etc. . Finally is the total score, is the overall satisfaction of the supplier service [3] , in order to guide the supplier not only to do these index requirements, but to the overall satisfaction as the ultimate goal.

Signal # 3: every internal customer matters. The survey was sent to everyone who dealt with suppliers, dozens of them in total. Everyone's scores are averaged to arrive at a total score. This can guide suppliers do not favor one over the other, to avoid the procurement of selected suppliers only listen to the procurement, design department only listen to the arrangement of engineers. In this case, the supplier is high-tech, with fewer competitors, engineers who don't nod, and buyers who can't just switch. Suppliers naturally know this, so in the price, rush fees, delivery time has not been flexible enough. Twice in a row, surveys have shown a decline in satisfaction among major user engineers, putting pressure on suppliers to stop . For Procurement, procurement is no longer a one-man operation, but on behalf of all the company's users, so the weight of the supplier to speak more heavy.

In the strategic supplier management section, we talked about integrating forces at the company level into a joint effort to push suppliers to improve. The questionnaire survey here is a typical example. The purchasing boss, the main designers and the quality manager are all in the meeting room. These people directly decide whether the supplier can get more new business, so the deterrent to the supplier is also very direct. Of course, it's also a good place to give praise if your supplier is doing well -- don't skimp on praise for your supplier, it will give them more incentive to do better.

Figure 78: How satisfied are you with the vendor's performance?

Let's take another look at how this vendor's satisfaction has changed over the last two quarters. Two quarters ago, internal customers reported that the most is the flexibility of the supplier is not enough, to rush work, adjust the schedule is very difficult, but also high rush costs. After the purchasing manager gave feedback to the supplier, the supplier began to improve. As a result, the flexibility score increased significantly this time, and complaints about rush fees decreased. This also shows that The last quarterly meeting was a success: It was a typical strategic supplier, capable and temperamental, but willing to listen to customers.

However, with the improvement of flexibility, response speed, delivery cycle, overall satisfaction and other indicators are deteriorating across the board. One of the reasons is that suppliers rush more work for the convenience of buyers, and some jobs have more flexible delivery dates, which will inevitably affect other jobs. This may seem like a bit of a push, but it's also a side effect of metrics: You get what you pay for; but when the overall capabilities of suppliers aren't improving, or they're not growing fast enough to keep up with the business, often at the expense of other metrics.

The second reason has to do with the huge increase in business volume. The buyer's business is growing too fast, and the supplier has been actively cooperating, hiring, adding capacity, buying additional equipment and so on. Therefore, the decline in these indicators should not be allowed to negate the efforts made by suppliers and blow them out of the water. As a good supply chain manager, to be able to see beyond the number of things, a comprehensive, fair interpretation of the number, recognition of the efforts of suppliers, suppliers to promote greater improvement.

1. Demand forecasting + demand management: the First Line of Defense in the supply chain

All predictions are wrong, but there is a difference between how wrong they are. The goal of demand forecasting is "as accurate as possible, as soon as possible correction" : First, how to effectively docking sales and operations, "from the data start, from the end of Judgment'' , make a "highest accuracy of the wrong forecast, " to strive for the launch accuracy? Second, the forecast is wrong, how to effectively manage demand, early detection, as soon as possible correction and remedy? Third, how to effectively implement demand forecasting and drive supply chain to respond effectively?

2. Inventory planning + inventory control: the Second Line of Defense in the supply chain

What if demand forecasts are wrong? The natural response of the supply chain is to set up safe stocks. Setting the water level of stock scientifically and reasonably is the key to put proper stock in proper place, improve customer service level and reduce stock. We will also discuss inventory control in detail: First, inventory is an angel is also a devil, how much is appropriate? Second, the inventory decline and rise again and again, a "kill the monster" , how to deal with? Third, Information asymmetry creates the bullwhip effect. How do you trade information for inventory?

3. Supply chain and supplier management: A PRACTITIONER'S PERSPECTIVE

The goal of supply chain is global optimization. Why is local optimization prevalent? Suppliers are responsible for most of the value-added activities in the supply chain. How to solve the problem of "selective, not managed" ? How to do "big purchase" and focus on suppliers as a strategic resource? The training focuses on the overall supply chain perspective, promotes cross-functional collaboration to optimize design, reduce costs, select and manage suppliers, effectively manage supply chain risks, and systematically improve supply chain performance. This also includes customer-appointed vendors, as well as key sub-vendor management.