Improve Supplier Relationships with More Frequent Feedback 

In a world where technology has continued to improve the way we communicate and gather feedback, why shouldn’t your supplier performance and relationship management be as simple and easy? 

In brick-and-mortar businesses, wooden suggestion boxes have been replaced by online reviews or kiosks where customers can hit a ‘smiley-face’ button to signal their satisfaction. Businesses can solicit feedback from customers in a way that is convenient and simple for the customer (leading to better response rates) and prompted in the moment when their experience is top-of-mind (leading to more accurate responses). Rather than gathering dust in a box, feedback is collected in real-time, so managers can observe changes and intervene to correct negative trends. 

This same approach can take your supplier performance management efforts from a bureaucratic check-box, to a source of valuable insight into contract health and performance trends. 

Technology has made it easier to gather feedback and assess performance in a variety of areas, from student learning to employee performance. This has impacted procurement teams as well, giving them more options than ever to collect feedback and improve their supplier relationship management. 

Why Should an Organization Consider Modern Tech for Supplier Performance Management? 

To be proactive and stay on top of their suppliers’ performance, procurement leaders need to have a finger on the pulse of their supplier poll. This requires a constant stream of data and information so you can determine trends and insights at a glance. 

Purpose-built technology helps you streamline and simplify supplier performance management activities. Here are some of the reasons you need to evaluate the way you conduct your process: 

  • Getting to actionable conclusions faster. Supplier performance management solutions take care of the manual parts of soliciting supplier performance feedback (creating and sending surveys, collecting and aggregating responses), so procurement teams can maintain an up-to-date picture of their supplier performance without the tedious and time-consuming work. 
  • Intervening with performance issues before they become a problem. Frequent feedback gives procurement teams more visibility into the progression of contracts, allowing teams to zero in on performance issues before they impact the organization. 
  • No more pulling teeth to get survey responses. As many teams have learned from experience, getting contract owners to fill out supplier performance surveys can be a headache. Modern survey methods meet stakeholders where they already are—and in today’s world, that means mobile devices—and reap the rewards in their response rates. 

Using Feedback and Performance Data for Better Relationships 

The key benefit of frequent feedback is that it empowers a proactive supplier relationship management process.  

So, how do you go from survey to satisfied stakeholders? To answer this, we dove into the research from a related field which has clear parallels to effective supplier relationship management: employee performance management. 

Like suppliers, employees are engaged in a long-term business relationship with an organization and are accountable to certain deliverables. Employee performance management—like supplier performance management—is undergoing transformation, as more managers realize the benefits of informal, ongoing feedback as opposed to the formal, infrequent methods of the past (i.e. the dreaded annual performance review). 

These insights from employee performance will help you leverage more frequent feedback to improve supplier quality and achieve a mutually beneficial relationship with your suppliers: 

1. Clarify Expectations During Supplier Communication 

Research on employee performance conducted by Jean Martin and Brian Kropp of corporate research firm CEB found that more frequent feedback can improve employee performance by up to 12% (Washington Post). The reason? They cited managers’ ability to clarify expectations as a key benefit. 

Supplier relationship management challenges often lie in the simple act of communication. In the relationship between a supplier and an organization, the contract established the term of the relationship and specifies a standard of service. Unfortunately, opportunities remain for miscommunication—especially given the frequency of change in some industries, like the public sector.  

By using frequent supplier performance surveys and evaluating suppliers, procurement teams can catch these issues early, intervene, and correct the mismatch in expectations. 

Ultimately, these surveys help your team create a better supplier strategy, averting bigger performance issues before they arise. 

2. Offer Proactive Rather Than Punitive Performance Management 

Nobody likes giving bad feedback. However, there’s good news! Research from leadership development experts Zenger and Folkman suggests that people are more receptive to negative feedback than you might think.  

Their research on employee performance concluded that employees actually want to receive constructive feedback and believe it is effective in improving their performance. Ninety-two percent of respondents agreed with the assertion: “Negative (redirecting) feedback, if delivered appropriately, is effective at improving performance” (Harvard Business Review). 

When it comes to procurement, supplier performance surveys are historically issued at the conclusion of a contract, at which point it’s too late for suppliers to make improvements or repair the relationship. 

This is a missed opportunity for everyone involved. More frequent feedback allows procurement teams to identify supplier performance issues, notify suppliers, and proactively work towards improvements. Constructive feedback can be the jumping-off point for conversations that ameliorate performance issues, resulting in happier stakeholders, reduced risk, and potentially cost savings for your organization. 

3. Recognize and Enhance Good Performance 

Recognition for good work is a powerful force in building trust and improving performance. This has been shown time and again in employee performance. Studies show that 69% of employees would work harder if they felt their efforts were being better recognized, and 78% of employees said being recognized actively motivates them in their job (LinkedIn Talent Blog). 

Thus, even if all your surveys come back with rave reviews, frequent feedback still has the potential to improve your supplier performance. 

In addition to ensuring continued strong performance, recognition can be the first step in moving from transactional supplier relationships towards partnerships — with attendant benefits in risk mitigation, coordination, and ultimately your bottom line. 

Build a Strong Supplier Relationship Management with Euna Procurement 

Throughout the sourcing process, your team puts great effort into identifying key suppliers to meet your needs, but why stop there? Effective supplier management is key to building relationships with suppliers and ensuring your organization receives the best goods and services possible. 

Euna Procurement offers you a seamless experience to manage your suppliers well, from award to renewal. Request a demo today to learn how you can get the most value out of your supplier relationships. 

Explore Other Resources

How Can We Help You?