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Supplier Councils

May 23, 2012

Earlier this year, an IACCM member asked for input on the purpose and structure of supplier councils. A number of organizations responded, with their answers reflecting some uncertainty over how best to approach this topic.

It led to the conclusion that many Supplier Councils seem to be rather general in character and without well formulated goals or objectives. They appear often to become a forum for the customer to present their goals, objectives, state of the business etc., in which suppliers largely listen. There may be some break-out sessions in which specific targets or topics are discussed, even roundtables at which ideas could be exchanged, but the measurable value often appears limited.

One response stood out for its clarity of purpose and direction, with the result that they have continued to attract senior level representatives from key suppliers and have been successful in engaging them, even across competitive boundaries.

“Ours are structured to focus on a particular objective, typically one that spans many industries.     For example we have a supplier council to provide advice on how we might increase spending with diverse and women owned suppliers.   We had another on environmental sustainability. Membership of the Council is usually at a senior level from companies that are representative of our supply base and geographies. Similarly membership from our company is at a senior level usually with leadership from our Purchases organization.

The Council meetings are advisory in nature. We want to come up with solutions that work well for both our company and suppliers.”

From the varied responses I received, I think this is a good approach. Otherwise, they often tend to become talking shops, and as a result the level of attendance starts to fall and they become moribund.

What is your experience – either as an organizer or as an attendee at such Councils? What do you consider represents ‘ best practice’ in formulating this type of supplier engagement?

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