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Management Principles #8

Updated: May 17, 2022

Principle 8 (ISO 9000): Mutually Beneficial Supplier Relationships

In an age where we are conditioned to mistrust everyone because (obviously!) everyone is “out to get us”, it’s all too easy to pass up the benefits of cooperation. The reality is that now more than ever, all the stakeholders on a given project are interdependent on each other, and especially a given organization with its suppliers. This management principle addresses this fact as an essential step towards excellence. This principle applies equally to the AV Company with its many equipment vendors and outside specialty subcontractors, as well as to the Technology Managers with their AV Company suppliers, both designers and integrators.

  • Do you just assume that you have all the answers, or do you pool your expertise and resources with your partners?

  • Do you push off your vendors that try to keep you up to date with their latest products and technology?

  • Do you identify and select your key suppliers?

  • Do you have open and clear communications, share information and future plans with your partners, or do you prefer to ‘leave alone and zap’ them with ‘scope creep’?

  • Do you inspire, encourage, and recognize improvements with your partners?

  • Are you concerned for their economic benefits, as well as your own key objectives?

Excellent organizations do not base their procurement policies on the price tag. They make their purchasing decisions based on TOTAL cost of procurement, inclusive of all the hidden costs of procurement decisions.

“It is a tragedy that, in the West, relations between…buyer and seller have been confrontational and adversarial…It is not uncommon for a supplier with a history of loyal service to be unceremoniously dumped when the buyer finds another supplier selling more cheaply. Nor is it uncommon for a supplier to gorge a customer during a sellers market and boom time…In the long haul, this win-lose philosophy can turn both sides into losers.”

(K.R. Bhote 1987, from “Juran’s Quality Handbook”, Fifth Edition)

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