Presentation Outline

Designing/Enhancing Effective B2B Relationships…

Charles E. Rumbaugh

87th Annual International Supply Management’s Conference

Institute for Supply Management 2002 San Francisco


Top Ten Ways To Determine If You Need to “Look” at Designing/Enhancing Relationships


Top Ten Ways (Factors) In Design…

10. Recognize “You” Need Suppliers/Customers!


Top Ten Ways To Determine Need…

Number 10

We Don’t Have Any Suppliers Or Customers!

Really? You’re Kidding!



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program!



Number 9

We Have Crisis Management “Tools” In-Place!

How did those “tools” work on “9-11?” Customers and/or Suppliers impacted?

Focal Point for Communication!



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program!

8. Your Code of Ethics must be part of the solution!



Number 8

Ethical Issues Are Always Surfaced In A Timely Manner!

Within AND Without the Organization?

Do Suppliers Abide by/with Your Code of Ethics?



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program! 8. Your Code of Ethics must be part of the solution!

7. Have a CPO!



Number 7

Do We Have Or Need A Chief Procurement Officer?

Who is the Advocate/Champion for the Supply Chain? Characteristics of a CPO

How is that function delegated below the CPO?



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program! 8. Your Code of Ethics must be part of the solution! 7. Have a CPO!

6. Designed to Mitigate Litigation



Number 6

Are You “Always” Threatened By/With Litigation With Suppliers/Customers?

How do you “handle” conflict? Rely upon “boiler-plate” terms and conditions? Tailored “statute-of-limitations” for claims?



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program! 8. Your Code of Ethics must be part of the solution! 7. Have a CPO! 6. Designed to Mitigate Litigation

5. Tailored to particular commodity and acquisition strategy



Number 5

Does The Claim/Dispute “System” Reflect The Commodity Or Acquisition Strategy?

• How does the strategy impact the “mode” of relationship-building communications?• Does the contract or purchase order type “drive” the answer? Commodity purchases verses

“more” sophisticated methods



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program! 8. Your Code of Ethics must be part of the solution! 7. Have a CPO! 6. Designed to Mitigate Litigation 5. Tailored to particular commodity and acquisition strategy

4. Terms & Conditions must be in tune with relationships!



Number 4

“Our Suppliers ‘Must’ Perform, Our Terms & Conditions Require It!”

• Wow! Transactional verses Strategic Relationship.

• “Pending resolution of the dispute” the supplier shall continue…

• Risk of small business not performing? Cash-flow impact?

• Any impact upon quality or acceptance criteria/warranty?



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program! 8. Your Code of Ethics must be part of the solution! 7. Have a CPO! 6. Designed to Mitigate Litigation 5. Tailored to particular commodity and acquisition strategy 4. Terms & Conditions must be in tune with relationships!

3. “Sharing” of Best Practices Improves Quality



Number 3

Performance and Quality Are Important Here!

• Rating/Evaluation System/Scorecard in-place?

Buyers and Sellers rated?• Best Practices Forum used?• Improved performance of the “entire” supply chain!



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program! 8. Your Code of Ethics must be part of the solution! 7. Have a CPO! 6. Designed to Mitigate Litigation 5. Tailored to particular commodity and acquisition strategy 4. Terms & Conditions must be in tune with relationships! 3. “Sharing” of Best Practices Improves Quality

2. Ombuds and a multi-step process



Number 2

Ombuds Are Used Extensively!

• Do you have ombudspersons? Facilitate/mediate Supplier Concerns Contract Formation verses Performance

• Identified in the RFPs?• Identified on the Organizational Website?• Crisis Management Tool!



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program! 8. Your Code of Ethics must be part of the solution! 7. Have a CPO! 6. Designed to Mitigate Litigation 5. Tailored to particular commodity and acquisition strategy 4. Terms & Conditions must be in tune with relationships! 3. “Sharing” of Best Practices Improves Quality 2. Ombuds and a multi-step process

1. $$$$$$$$$$$$$$$$$$



Number 1

Money Is “Job” One…!

• Makes good financial sense to have effective communications and, thus, enhance B2B relationships!

• Goes to bottom-line!


Characteristics Of An Effective System…

• Top 10 Ways “Considered” In Design• Goal is Team-Building except…• Internet and phone: Use/Style, Responsiveness, etc.• Communication and Negotiation Skill Training a Must!• Multi-step Process/System (in some/which cases?) 1. Confer in good faith within set period of time 2. Method/time for escalation to CPO/Senior

Management 3. Expert Advice/Neutral Opinion 4. Ombuds/Mediation/Facilitated Negotiation 5. Binding Commercial arbitration OR Litigation

BATNA--Baseball arbitration



10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program! 8. Your Code of Ethics must be part of the solution! 7. Have a CPO! 6. Designed to Mitigate Litigation 5. Tailored to particular commodity and acquisition strategy 4. Terms & Conditions must be in tune with relationships! 3. “Sharing” of Best Practices Improves Quality 2. Ombuds and a multi-step process 1. $$$$$$$$$$$$$$$$$$


Charles E. Rumbaugh

87th Annual International Supply Management’s Conference

Institute for Supply Management 2002 San Francisco

[email protected]

Presentation Outline

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