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Designing/Enhancing Effective B2B Relationships…

Designing/Enhancing Effective B2B Relationships…. Charles E. Rumbaugh 87 th Annual International Supply Management’s Conference Institute for Supply Management 2002 San Francisco. Designing/Enhancing Effective B2B Relationships….

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Designing/Enhancing Effective B2B Relationships…

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  1. Designing/Enhancing Effective B2B Relationships… Charles E. Rumbaugh 87th Annual International Supply Management’s Conference Institute for Supply Management 2002 San Francisco

  2. Designing/Enhancing Effective B2B Relationships… Top Ten Ways To Determine If You Need to “Look” at Designing/Enhancing Relationships

  3. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 10. Recognize “You” Need Suppliers/Customers!

  4. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… Number 10 We Don’t Have Any Suppliers Or Customers! Really? You’re Kidding!

  5. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program!

  6. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… 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!

  7. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 10. Recognize “You” Need Suppliers/Customers! 9. Part of “Crisis Management” Response Program! 8. Your Code of Ethics must be part of the solution!

  8. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… 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?

  9. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 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!

  10. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… 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?

  11. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 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

  12. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… 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?

  13. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 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

  14. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… 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

  15. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 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!

  16. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… 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?

  17. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 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

  18. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… 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!

  19. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 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

  20. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… 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!

  21. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 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. $$$$$$$$$$$$$$$$$$

  22. Designing/Enhancing Effective B2B Relationships…Top Ten Ways To Determine Need… Number 1 Money Is “Job” One…! • Makes good financial sense to have effective communications and, thus, enhance B2B relationships! • Goes to bottom-line!

  23. Designing/Enhancing Effective B2B Relationships…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

  24. Designing/Enhancing Effective B2B Relationships…Top Ten Ways (Factors) In Design… 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. $$$$$$$$$$$$$$$$$$

  25. Designing/Enhancing Effective B2B Relationships… Charles E. Rumbaugh 87th Annual International Supply Management’s Conference Institute for Supply Management 2002 San Francisco ADROffice@Rumbaugh.net

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