Wednesday, 21 November 2012

On boarding suppliers for e-Sourcing

If you are facing a bit of resistance from some of your suppliers to e-Sourcing, here are some tips.   
Please also see our guide on ‘How to enrol participants’ from our resources page http://marketdojo.com/resource. It may not solve all your problems, but it might help.

You can do various things to mitigate supplier resistance and there is no right or wrong answer.

1. Make sure there is a clear directive from senior management and communication that this is how business will be awarded
2. Make sure there are no routes in the organisation that will countermand the process
3. Chat to all the suppliers first and dont just send an invite
4. To bring them on board maybe run an RFQ first just to get them used to e-Sourcing befor running an auction
5. If you are going to do an auction then you could run it on a buyers choice basis and say you will bring the top 3 suppliers in after an auction to talk about other areas apart from price. Or you could run a weighted event to take into account the other factors during the live event.
6. You could use the event as a way of consolidating business and so making it more attractive
7. On the first communication you should say why they are doing it...business directives etc...
8. You can also sell the benefits of an auction. Many suppliers find the first time tough however after the initial hurdle it becomes easier and it is more transparent than paper RFQ's.
9. If there is an incumbent supplier, you should stress the need to work together on this. If you have any issues with specs or otherwise then the other suppliers might be not bidding like for like and the incumbent will lose out.
10. You could also send your suppliers our guide on 'Psychology of Online Negotiation Events' and 'Myths of Online Negotiation Events'. If a supplier reads these guides which discuss the importance of communication, their attitude might change. (this is available in the resources section mentioned above).

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