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Best practice and strategic planing
Managing and developing supplier relationships
Scott Leydin
Manager
Global Logistics Program Management Office
Hewlett Packard
Scott Leydin Managing and developing supplier relationships
Agenda• Introduction
• Key success factors
• Common pitfalls
• Management techniques
• Developing relationships
• Case study – beyond return
• Questions
Scott Leydin Managing and developing supplier relationships
Introduction• Evolution
– All done in house (insource)
– Outsource• 3PL
• LLP (Lead Logistics Provider)
• 4PL
• Who is 1PL, 2PL and is 5PL next?
• Basic principles• Customer experience must remain the same or
be enhanced• Cost benefit to the organisation (total cost)
Scott Leydin Managing and developing supplier relationships
Key success factors• Logisticians with strong supplier management
skills
• Clearly defined performance measures
• Disciplined supplier management process
• Thorough understanding of the customers
business
• Willingness to challenge the validity of the
customers strategies
Scott Leydin Managing and developing supplier relationships
Common pitfalls• Poorly defined scope of work / tender
• Unclear service level expectations
• Insufficient attention to contract formation
• Inadequate transfer of knowledge and
transition planning
• Relationship fatigue
Scott Leydin Managing and developing supplier relationships
Management techniques
What gets measured
gets done
What gets rewarded
counts
What gets done gets
rewarded
What counts gets
measured
Scott Leydin Managing and developing supplier relationships
Management techniques• Daily feedback report – verbal and written
• Weekly key performance monitoring and
operational reporting
• Bi – weekly key task monitoring
• Monthly key performance monitoring and
operational reporting
• Quarterly strategic initiative reviews
Scott Leydin Managing and developing supplier relationships
Developing relationships• Must have
– Mutually beneficial outcomes
– Open and honest communication
– Multiple relationships within the organisation
– Dedicated non-ops management
– Respect for the expertise of the supplier
– Early involvement in strategic initiatives and
problem resolution
Scott Leydin Managing and developing supplier relationships
Developing relationships
Control
Cost Process
Collaborate
Strategy Solutions
Scott Leydin Managing and developing supplier relationships
Case study – beyond return• Problem definition
– Reverse logistics process not meeting customer
expectations
– Average turn around time of 4.5 weeks
• Impact
– Negative customer experience
– Financial loss due to inventory write down / write
off
Scott Leydin Managing and developing supplier relationships
Case study – beyond return• Resolution process
– Stakeholder meeting
– Validate and re-document process
– Agree on realistic turn around time expectations
• Identified causes
– Lack of focus on performing the process
– Little understanding of process interdependencies
– Inadequate process measures
– Policies not being enforced
– Supplier not escalating customer contribution to the
cause
Scott Leydin Managing and developing supplier relationships
Case study – beyond return• Result
– Turn around time reduced to 10 days
– Customer experience enhanced
– Process measures re-defined and additional
measures included
– Reduction in obsolete inventory write downs /
write offs
– New support processes introduced
Scott Leydin Managing and developing supplier relationships
Key points• People with the right skill sets
• Clearly defined expectations
• Disciplined management processes
• Leverage the suppliers expertise
Stream:
Title:
Presented by:
Best practice and strategic planing
Managing and developing supplier relationships
Scott Leydin
Manager
Global Logistics Program Management Office
Hewlett Packard
