Both sides of the deal

Supply Management, Mar 27, 2008 by Bagshaw, Steve, Snell, Paul

What happened when a buyer and a supplier swapped places for the day? Steve Bagshaw and Paul Snell were on hand to find out

If you could sit your suppliers down and impart one piece of information to them, what would it be? If there were one demand your organisation could make to improve or streamline relations, which thing would you go for? More clarity with bids? A reduction in the amount of ''marketing bumph'' that accompanies submissions? A more solid commitment to a genuine partnership? Stop calling? Or perhaps just lower prices.

Well, SM arranged for a buyer and a supplier to swap places for a day to see what happened. Of course, it was also a chance for the vendor to detail some of their frustrations with procurement. Each had a chance to experience the other's job and to see just what it is like on the other side of the fence.

Eagle-eyed readers will recall that at the end of 2006 we ran the last SM "job swap" when a private sector buyer changed places with a public sector counterpart for a day. This time the buyer - Gordon Knowles, sourcing executive from Reuters (pictured left) changed with a supplier - Gary Downey, marketing director from IKON (right). And a member of the SM team was on hand with each 'swapper' to record the event.

Most people are familiar with Reuters, the international news organisation. Fewer, and particularly those not involved in the purchase of office equipment or facilities services, will know IKON. It is a multi-billion dollar organisation, based in the US but with a large European presence. It supplies copiers, printers and printing technology services to companies including HSBC, BOC and Boots. But not to Reuters. So let's see how they got on...

10AM - IKON

Gordon is introduced to IKON by David Clack, marketing manager. He hears about what the company does, its turnover ($42 billion a year), customers and introduction to the staff "I go on supplier visits two or three times a week, so this kind of thing is not unusual,'' says Gordon.

So how does it work from the supply side? What are vendors thinking before they sit down with would-be clients? David runs through a pitch he carried out recently with a prospective client Much of the content is the type of thing you would expect - what they can do, how and why they are so good at it But there are one or two surprisingly candid admissions. "Here we get to the fear part [of the sales tactic]," says David, "the "what will happen if you donf situation?" Worth looking out for, if you don't do so already.

Depending on the size of the organisation, between 1% and 3% of annual revenue goes on print spending. A lot for any organisation. At the end of the pitch, Gordon's first question is: "What are you going to save us? That*s what buyers want to know." Reinforcing, perhaps, the stereotypical view of procurement professionals, but nonetheless an important point

1OAM-REUTERS

Gary arrives at Reuters' office, located next to the picturesque St Katharine Docks in London. First on the day's agenda is an introduction from Ron Jarman, global head of sourcing at the firm and current CIPS president

He explains some of the basics about procurement at Reuters a spend of around �1 billion worldwide on a range of goods and services including technology, travel, office equipment and business services.

Gary notes that the office is very quiet this morning, even for a Friday. Jarman explains that although the sourcing team are based here, much of their time is spent "hot-desking" and working with stakeholders in the firm's other location in Canary Wharf.

11AM - IKON

Running through the pitch acts as a good springboard for getting into the nitty-gritty of supplier relations (or from IKON's perspective, buyer relations).

"One of our huge frustrations is the amount of repetition we have to make in a submission," says David. "Often we are asked what amounts to the same question three or four times in the same bid."

Gordon recognises the problem, and explains there is a very good reason for it "Questions from various stakeholders are added to ours before we send them on to you. There is probably some overlap." But he emphasised that it is important for suppliers to complete all the questions, even if they are asked more than once. "When we get the bids back different parts are sent to individual stakeholders so they don't see the whole document. And if a response to one question is 'see question 10' and that stakeholder [didn't ask and therefore] doesn't have question 10, it looks as if the point has not been addressed."

This does seem to be an unnecessarily arduous request - and one based on satisfying a process rather than a need. Bids take time and as more than one member of the IKON team explains, it has between 2,000 and 2,500 live opportunities at any time. And, like all suppliers, while it understands buyers' demands, their time could be used more efficiently if buying organisations allowed it.

Another frequent, and allied, problem is the perception that some tenders aim merely to "test the water". Vendors feel there is little chance the contract will move elsewhere and the procurement team just wants to make sure the incumbent's price and terms are in line with what is on offer elsewhere. "We don't do that," Gordon assures us all. "But I can imagine it goes on."