I recently read an interesting email newsletter from a friend of mine, Ann Noder at Pitch Public Relations™, and I salute my friend’s skill at getting my attention.
Her piece was called, “Ways to Take Control of Your Supplier Management Processes,” and a lot of her material has bled into this post. Supplier management is all about process, but how often do we turn our attention to the process we use to manage the supplier relationship management process?
According to Ann, “Supplier relationship management is hard enough – don’t make it harder by giving in to internal disorder. Starting with that first key step of going paperless, these simple suggestions will help your organization focus on improving efficiencies, supporting compliance, and building healthier supplier relationships while mitigating risk.”
In February of 2017, the GAO issued their latest review of risk areas in the Supply Chain. Their key findings:
DOD’s inventory management practices and procedures have been ineffective and inefficient. DOD has experienced high levels of inventory that were in excess of requirements and weaknesses in accurately forecasting the demand for inventory items.
DOD has faced challenges in delivering supplies and equipment, including not meeting delivery standards and timelines for cargo shipments as well as not maintaining complete delivery data for surface shipments.
DOD has had weaknesses in maintaining visibility of supplies, such as problems with inadequate radio-frequency identification information to track all cargo movements.
Sadly, the DoD is not unique. Every government department faces challenges. These challenges are compounded by the government’s inherent instinct to overlay bureaucracy on any process and the vast amount of data on the loose in the supply chain. In the land of government contracting across the supply chain, streamlining the supplier relationship management process isn’t just low-hanging fruit; it’s a field of ripe watermelons lying on the ground.
So, let’s overlay Ann’s recommendations for the supply chain in general against the federal government.
The government is ahead of their private sector support contractors. For example, the federal government has established a central repository, the System for Award Management (SAM). This is an official website of the U.S. government. There is no cost to use SAM. You can use this site for FREE to register to do business with the U.S. government, update or renew your entity registration, and generally take care of what needs to be taken care of to maintain certifications.
Contrast this to the processes used almost universally by prime contractors. They typically organize by project, and so for every new opportunity or engagement the subs need to fill out a new batch of paperwork. Great from the primes point of view, but adds to overhead and total cost, and introduces opportunity for error. Hardly best business practices.
Maintain Your Records
Keep your records up to date. Having a clear assessment and inventory of existing contracts is vital, and the best way to do that is to digitize. The same holds for performance level agreements and performance reports. Have a single point of contact accountable for the portfolio, and do a management review quarterly. Unfortunately, with the constant turnover in government programs, both on the government side and the contractor side, this level of diligence is necessary.
Make Sure Internal Controls Are Efficient
Effective control is more than password protection or a lock on the file cabinet door. Design the process and streamline it. There is a military department that has defined a rigorous and logical supply chain oversight process. Unfortunately, it is serial, and each step on the review process goes all the way up to the top of the organization, with check steps at each level of the hierarchy. Sometimes the duration of the performance review cycle – and this is a logistics oversight process – can take months.
Simplify Your Collaboration Tools
Email isn’t a collaboration tool. Maintaining files in the cloud can be. Shared databases surely are. Standardize date, eliminate duplication, and focus on the vital few. Data is a means to an end, not an end in itself.
Estimates of the additional oversight costs associated – as reported by a study performed at the University of Tennessee – may be as much as 25% of the budget. The Federal Acquisition Regulation (FAR Part 15) is the antithesis of streamlined and efficient supply chain oversight.
Drive Accountability and Transparency
There are key steps you can take to boost efficiency without sacrificing quality. Apply good management practice and assign ownership. If everybody owns it, then nobody owns it. Use technology that ensures the approval process is both easily accessible by key stakeholders and easy for them to understand and navigate. Make sure integrated technology and tools gives decision makers centralized access to everything they need to move a plan or a contract forward. The less time an approver spends digging around for missing info, the better.
Once defined and agreed upon, shared processes will drive accountability on both sides of the table. Ideally, your process management solution will also enable you to assign tasks and gain visibility on outputs and performance. These open collaboration tools will ultimately enhance collaboration as you shift from problem-finding to problem-solving—together.