How to Select Innovative Supplier Partners Using a 5-Step Project Management Approach
How to Select Innovative Supplier Partners Using a 5-Step Project Management Approach
Clearly, companies are viewing changes in supplier management as a way to gain more value from their partners. Consequently, performance expectations are increasing, and companies are using their supplier partnerships as a means of driving innovation. Using the right supplier selection tools can play a critical role in building value-based relationships.
So, how can you ensure a successful selection process?
What is the Project Management Approach to Selecting the Best Suppliers --- And How Will It Help Your Organization?
The Project Management Institute (PMI) model serves as an excellent framework for procurement activities. This structure can help procurement teams focus their attention on each key element in the selection process and identify the real treasures in their potential supplier base. The PMI model identifies five process groups teams can use to design and manage a value-based selection process. These are:
1. Initiating – Ensures the support of leaders in your organization so you can move forward.
2. Planning – Critical for identifying all of your business needs.
3. Executing – Provides a structured approach for evaluating bids to guarantee desired results.
4. Monitoring and Controlling – Forces you to evaluate and incorporate any new information.
5. Closing – Formalizes results and establishes a plan for implementation.
Initiating – The First Critical Step in Selecting an Innovative Supplier Partner
In the Initiating phase, the sourcing of a product or service is approved and key players are identified, including stakeholders and the project team. This is critical in large organizations where a product or service such as a communications process, for instance, touches a multitude of business units and functional groups.
For example, the General Motors (GM) dealer communications process involves approximately 10 constituent groups within GM alone. When the dealer relations team needed to identify a new supplier, they canvassed the corporation. They identified each department that used the process, even those that only sent materials to dealers occasionally. This group of stakeholders was involved up front, and the team was able to avoid issues later in the procurement activity.
Planning – A Phase That Must NOT Be Shortchanged Just So You Can Find a Supplier Quickly
The team uses the Planning phase to flesh out business and performance requirements in detail. Each stakeholder group feeds its unique set of expectations to the team, who then incorporates them into the requirements. The team identifies the risks, scope, cost targets, and timing of the procurement effort.
This phase has some unique aspects for a procurement project, the most important of which is identifying qualified potential suppliers. The team should think creatively about how the new supplier must create value and provide benefits that were missing in the past. With proper planning, an organization can move from having suppliers who just sit on the sidelines to having real value partners who support the strategic vision. For instance, suppose a sales organization wishes to upgrade its online store and improve order-processing time. They must identify a fulfillment supplier with strong IT capabilities and state-of-the-art warehousing.
A note of caution on the Planning phase is in order. Procurement teams must resist the temptation to shortchange this step in the name of finding a supplier quickly. The task of identifying requirements can take months, as was the case with GM’s dealer communications process. Identifying requirements up front will uncover possible conflicts and inadequacies. For example, if a benefits solutions group wants to implement a web-based application process, they need to know whether their existing technology infrastructure will accommodate such a change. Knowing these things will help the team come up with a realistic task list and timeline for implementation.
Executing – The Third Critical Step in Selecting an Innovative Supplier Partner
In the Executing phase, the team brings to bear the fruit of the Planning phase by creating and distributing a Request for Proposal (RFP) that reflects the business requirements. The team uses the requirements to develop evaluation and ranking tools, and then uses these tools to assess each response to the RFP.
The team identifies a subset of suppliers as candidates for negotiations, and conducts a series of detailed discussions that include clarification of the RFP response, scope issues, schedule, and other areas of concern. This step includes multiple rounds of pricing discussions that will lay the groundwork for a final selection.
Monitoring and Controlling – The Fourth Critical Step in Selecting an Innovative Supplier Partner
In the procurement context, Monitoring and Controlling involves a review of the scope, requirements, schedule, and other metrics involved in the evaluation. This review creates an opportunity to refine assumptions and get feedback from the respondents on their ability to meet or exceed the stated performance goals. Teams can use the feedback to calibrate the performance goals and to make tradeoffs of scope versus schedule, for example. Then they can create a more realistic set of performance goals, if appropriate. The team documents changes to performance metrics, scope, and schedule, and presents these for approval as well.
Closing – The Last Critical Step in Selecting an Innovative Supplier Partner
Closing is the last phase of the project. Here the team recommends a supplier to the appropriate groups, and the purchasing managers develop the contract documents. The procurement team develops guidelines on details to watch for while managing the new contract. For example, if the team awards a contract to a web developer on the condition that the developer commits additional resources for implementation, the commitment needs to be captured in the guidelines to ensure it is not overlooked. This document also serves as a reference for future procurement activities, including any follow up work with the selected supplier.
This five-step method is an indispensable tool for addressing current and future requirements, particularly for multifaceted contracts involving diverse stakeholder groups within your organization. Using it will ensure your ability to select a partner with the vision and capabilities needed to create a sustainable, scalable solution that advances your strategic goals.
How to Select Innovative Supplier Partners Using a 5Step Project Management Approach - To learn more about this author, visit Monica Johns's Website.
Like this article? Share it with your friends
Now more than ever, supplier selection must produce stellar results as companies increase their focus on supply chain management and push more requirements down the chain to their partners. Business continues, but with different strategies. For example, Siemens AG plans to reduce costs by centralizing 47% of its procurement spending by 2010, compared to its current level of 29%.
Clearly, companies are viewing changes in supplier management as a way to gain more value from their partners. Consequently, performance expectations are increasing, and companies are using their supplier partnerships as a means of driving innovation. Using the right supplier selection tools can play a critical role in building value-based relationships.
So, how can you ensure a successful selection process?
What is the Project Management Approach to Selecting the Best Suppliers --- And How Will It Help Your Organization?
The Project Management Institute (PMI) model serves as an excellent framework for procurement activities. This structure can help procurement teams focus their attention on each key element in the selection process and identify the real treasures in their potential supplier base. The PMI model identifies five process groups teams can use to design and manage a value-based selection process. These are:
1. Initiating – Ensures the support of leaders in your organization so you can move forward.
2. Planning – Critical for identifying all of your business needs.
3. Executing – Provides a structured approach for evaluating bids to guarantee desired results.
4. Monitoring and Controlling – Forces you to evaluate and incorporate any new information.
5. Closing – Formalizes results and establishes a plan for implementation.
Initiating – The First Critical Step in Selecting an Innovative Supplier Partner
In the Initiating phase, the sourcing of a product or service is approved and key players are identified, including stakeholders and the project team. This is critical in large organizations where a product or service such as a communications process, for instance, touches a multitude of business units and functional groups.
For example, the General Motors (GM) dealer communications process involves approximately 10 constituent groups within GM alone. When the dealer relations team needed to identify a new supplier, they canvassed the corporation. They identified each department that used the process, even those that only sent materials to dealers occasionally. This group of stakeholders was involved up front, and the team was able to avoid issues later in the procurement activity.
Planning – A Phase That Must NOT Be Shortchanged Just So You Can Find a Supplier Quickly
The team uses the Planning phase to flesh out business and performance requirements in detail. Each stakeholder group feeds its unique set of expectations to the team, who then incorporates them into the requirements. The team identifies the risks, scope, cost targets, and timing of the procurement effort.
This phase has some unique aspects for a procurement project, the most important of which is identifying qualified potential suppliers. The team should think creatively about how the new supplier must create value and provide benefits that were missing in the past. With proper planning, an organization can move from having suppliers who just sit on the sidelines to having real value partners who support the strategic vision. For instance, suppose a sales organization wishes to upgrade its online store and improve order-processing time. They must identify a fulfillment supplier with strong IT capabilities and state-of-the-art warehousing.
A note of caution on the Planning phase is in order. Procurement teams must resist the temptation to shortchange this step in the name of finding a supplier quickly. The task of identifying requirements can take months, as was the case with GM’s dealer communications process. Identifying requirements up front will uncover possible conflicts and inadequacies. For example, if a benefits solutions group wants to implement a web-based application process, they need to know whether their existing technology infrastructure will accommodate such a change. Knowing these things will help the team come up with a realistic task list and timeline for implementation.
Executing – The Third Critical Step in Selecting an Innovative Supplier Partner
In the Executing phase, the team brings to bear the fruit of the Planning phase by creating and distributing a Request for Proposal (RFP) that reflects the business requirements. The team uses the requirements to develop evaluation and ranking tools, and then uses these tools to assess each response to the RFP.
The team identifies a subset of suppliers as candidates for negotiations, and conducts a series of detailed discussions that include clarification of the RFP response, scope issues, schedule, and other areas of concern. This step includes multiple rounds of pricing discussions that will lay the groundwork for a final selection.
Monitoring and Controlling – The Fourth Critical Step in Selecting an Innovative Supplier Partner
In the procurement context, Monitoring and Controlling involves a review of the scope, requirements, schedule, and other metrics involved in the evaluation. This review creates an opportunity to refine assumptions and get feedback from the respondents on their ability to meet or exceed the stated performance goals. Teams can use the feedback to calibrate the performance goals and to make tradeoffs of scope versus schedule, for example. Then they can create a more realistic set of performance goals, if appropriate. The team documents changes to performance metrics, scope, and schedule, and presents these for approval as well.
Closing – The Last Critical Step in Selecting an Innovative Supplier Partner
Closing is the last phase of the project. Here the team recommends a supplier to the appropriate groups, and the purchasing managers develop the contract documents. The procurement team develops guidelines on details to watch for while managing the new contract. For example, if the team awards a contract to a web developer on the condition that the developer commits additional resources for implementation, the commitment needs to be captured in the guidelines to ensure it is not overlooked. This document also serves as a reference for future procurement activities, including any follow up work with the selected supplier.
This five-step method is an indispensable tool for addressing current and future requirements, particularly for multifaceted contracts involving diverse stakeholder groups within your organization. Using it will ensure your ability to select a partner with the vision and capabilities needed to create a sustainable, scalable solution that advances your strategic goals.
How to Select Innovative Supplier Partners Using a 5Step Project Management Approach - To learn more about this author, visit Monica Johns's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
|||
David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
|||
Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
|||
Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
|||
Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
|||
Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
|||
Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to Monica's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
|
||
 |
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Why New Businesses Fail Risk Management FREE Realestate CSS Template Choice of Forum What’s Wrong With Your Site? |
|
 | ||
 |
Top 50 Social Media Blogs
Top 50 Social Media Blogs | |
 |
Top 50 Franchising Blogs
Top 50 Franchising Blogs | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
| ||||||||||
|
| ||||||||||
|
|
||||||||||