The BETTER AGREEMENT GUIDE™
BETTER BUSINESS is in The BAG™
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AGREEMENTS WITH SUPPLIERS
Think of everyone essential to the success of the enterprise as part of it. Tend toward inclusiveness. The Resolutionary. Suppliers are a critical part of all organizations. Your success depends on their delivering what you want for a fair price, on time, and in good condition. Even more than that, it depends on their anticipating what your needs will be and fulfilling them. Wouldn't it be great if that was how all supplier relationships were structured? Suppliers as partners, allies, collaborators part of the team and treated as such. The best example of a supplier as a partner was one I facilitated for a large grocery chain and the company who supplied them with dairy products. Operating Agreement 1. Intent and Vision: It is our intention to create a partnership that is seamless. The vision we have is that all forty seven of our stores will be supplied with milk and other dairy products in a seamless manner, with little attention needed day to day. The vision is that Metcalf Dairies will monitor dairy products daily, replenish products when needed, and keep freshness levels high while limiting spoilage to between 2 and 4 percent of the gross amount of products delivered. 2. Roles: Metcalf will supply the dairy products, and Gengarelli Brothers will supply the store locations. Metcalf will be aware of the times when they need to be out of the supermarket so that inventory can be taken and other products can be delivered. 3. Promises: Metcalf promises to:
5. Measurements of Satisfaction: The success of our "partnership" will be measured by the following standards:
7. Renegotiation: We understand that circumstances change and events will happen that we cannot predict. We agree that if something happens, we will rely on the open communication of our front line staff first before any management intervention. 8. Consequences: We both recognize the negative consequences of our partnership not working for Metcalf, the loss of a huge, lucrative account, and for Gengarelli, the need to pay close attention to a department that was essentially self managed. We also agree that if either one of us breaks a promise, we will donate $100 to the Crossroads Center of Chicago. 9. Conflict Resolution: After we have spoken and tried to work out the conflict, the first thing we will do is contact the gentleman who helped us structure this agreement and ask for his help. If that fails, we will bring in a senior management team from both of our organizations. If all else fails, we will use the arbitration services of AAA. 10. Agreement? We are satisfied that we have a clear agreement and the foundation for an ongoing partnership. This agreement is simple. It structured the relationship in a seamless way and created a context of partnership. It provided the context within which everyone got what they wanted with little direct interaction. This arrangement worked very well for the fouryear period before the supplier merged into a larger operation. The beauty of this relationship is that although Metcalf was an independent entity, they functioned as an important part of Gengarelli's business. The Gengarelli management team was relieved of the responsibility for closely managing this important segment of their business. Summary: Suppliers are a critical part of all organizations. Success depends on their delivering what you want, for a fair price, on time, and in good condition. It is important to see suppliers as partners, allies, and collaborators who are part of the team and recognized as such. Exercise: Can you think of a supplier to your organization who could be a real partner, like the example in the chapter? See if the supplier is interested in speculating about how that would serve both of you. Use the template to structure an agreement. |
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