SIG University Certified Supplier Management Professional (CSMP) program graduate Grzegorz A. Pioruński shares a different perspective on how to implement modern governance into a supplier-vendor relationship.
Some years ago, I heard someone who had not been exposed to significant processes and had no chance to consider all industry connections of a business event say: “Why must present-day everything be a project? This is just a task to do.” These words are the opposite of how I see modern governance in business and risk management.
If you take a closer look, anything we do is a kind of project, smaller or larger, but on nearly every occasion, we plan action, steps, workflow, risk, and expected outcome. Whether or not we are aware of this, this is a fact. Even such a simple task as going to a store to purchase a loaf of bread can be described as a project.
We do plan when to go (the store must be open), what to wear outdoors (depending on weather conditions), we do plan to have some money in our pocket (enough to pay, and not too much “just in case”), we do try crossing roads safely, we do expect to return home with the said bread. The deeper you consider it, the more details and sub-tasks you can recognize. Sometimes you do this on your own; on other occasions, you may like involving other stakeholders, whomever it may mean.
The same strategy we shall apply in business. The more critical the process or, the more significant business it is, the more risky your operation may be, and the more carefully you should prepare, perform and govern the project.
If we take the termination of a collaboration contract as an example, it may look simple for those who have not been involved in such events yet – “you simply send a thank you email to your former supplier, and that’s it.” This could not be more wrong in most cases than this. Let’s focus on the final stage of the exit plan for a moment. Trying to map all possible and actual connections of such an event can be a true challenge.
While we come to the end of the contract period and we’re not willing to renew it, it may affect not only the continuity of your business the other day it may cause concerns on intellectual property, proper destroying discontinued specifications and proving this by your vendor, tax issues, or availability of post-sales service or spare parts – to mention few.
How about your competitors willing to advantage by using your existing supplier? How about your business continuity – do you have a replacement on hand? Is the stock count large enough? Process handover performed seamlessly?
Yes, governing suppliers is a critical project on a large scale. Even in your organization, tens of stakeholders or departments/individuals may need an update and be willing to share their opinion. You need to plan who should be your internal partner tier 1, client, or who should be just an addressee of updates.
This means a professional buyer, negotiator, supplier/vendor manager, sourcing professional, or category manager must have good skills in their “basic” profession. They require excellent strategic planners, open-minded thinkers, and great communicators; this is the essence of learning how to be a good, safe and effective project owner or a critical participant in a vendor management role or governance process.
We require continuous learning while facing global markets in business; it is not only our employers’ responsibility to secure their business safety. It is more and more often about the customers’ safety, business reputation, and financial efficiency being the core driver of the 21st-century economy.
The Certified Supplier Management Professional program is a five-week course delivered through SIG University’s unique education platform. Visit our website to learn more about the discipline of governance and enroll for the upcoming semester.
Grzegorz A. Pioruński, originally from Poland, with 8-years’ professional episode in Norway. Presently, working back from Poland, serves a US-based financial organization with true global presence.
Education background from: mathematics-and-physics secondary school, 5-years’ course of electrical engineering with specialization in power energetics, post-graduate for master’s degree holders – professional teacher diploma, post-graduate diploma for master’s degree holders in business administration with internal audit and internal control specialization.
Has worked successfully for over 20 years in the industry, 6 years of those in a printing house back office with analytical role, 1 year as an IT engineer, and entire rest of the time holding different procurement and sourcing roles. In parallel, in each of those organizations he also ran IT-related projects, most often related with new platforms implementation, categorization or similar. The industries served had been from construction systems manufacturing, through heavy industry (chemical products), hi-end medical devices manufacturing, up to financial services as the most recent.