Supplier satisfaction

Transcription

1 Supplier satisfaction Prof. dr. Holger Schiele NEVI Inkoopdag 2016 This report is intended exclusively for employees of the client. Its distribution, quoting of its contents and reproduction complete or in part for the purpose of conveying it to a third party requires the prior written consent of Universiteit Twente. The text and graphics summarised here have been used in the course of a presentation; they do not represent a full documentation of the event and are incomplete without oral explanation _Schiele Page 1

2 Supplier satisfaction NEVI inkoopdag Agenda Twente Supplier satisfaction why? Supplier satisfaction how? Discussion Wrap-up _Schiele Page 2

3 The University of Twente is a purchasing science and education hub, linking research with practice through engaged scholarship Prof. Dr. Holger Schiele, University of Twente Prof. Schiele Twente: Prof. dr. Jan Telgen Pubic Procurement, Dr. Hans Voordijk Purchasing in construction,prof. Dr. Holger Schiele, since 2009 Chair of Technology Management Innovation of Purchasing, Production and Logistics (h.schiele@utwente.nl) Before joining academia Schiele accumulated 10 years experience in industry and consulting (Preussag AG, PWC, h&z). Current topics: supplier satisfaction and preferred customer status, innovations from and with suppliers One fourth of department income stems from third party financing (mostly firm projects) Twente is among the top European universities in purchasing research and education In 2010 was recognised as center of excellence by the academic association IPSERA In 2014 Twente was the first university to achieve the Global Standard in Professional Purchasing Education administrated by the international federation IFPSM Prof. Telgen _Schiele Page 3

4 Twente started the new master track purchasing and supply management and hosts a European recruitment fair Highlights New master UTPC career fair Bachelor specialisation purchasing since 5 years Twente is the second public university in Europe to introduce a purchasing master track (one year) Two year double diploma with Lappeenranta (Finland) possible Teachers from academia and practice Every year the only European recruitment conference exclusively dedicated to purchasing talent is organised in Twente 2016: 12 firms, 120 participants, speeches and fair, open to all ( Serious Game Developed a serious game Three training modules: 1) sourcing levers (how to achieve cost savings), 2) ensuring supplier satisfaction and 3) getting innovations from suppliers Student and corporate version Source: UTIPS _Schiele Page 4

5 Supplier satisfaction NEVI inkoopdag Agenda Twente Supplier satisfaction why? Supplier satisfaction how? Discussion Wrap-up _Schiele Page 5

6 Collaboration with suppliers succeeds when both sides value the shared projects to the same extend, still, research on how to become a preferred customer is needed Basic Concept Perspective Buyer Successful Collaboration Supplier perspective Preferred supplier Preferred customer _Schiele Page 6

7 For sale s professionals a differentiation between customers, investing in development customers and profiting from exploitable ones makes sense Example from a sales training _Schiele Page 7

8 A highly attractive preferred customer enjoys the best service a supplier can deliver Definition preferred customer Definition A firm has preferred customer status with a supplier if the supplier offers the buyer preferential resource allocation. This can be accomplished in several ways. A supplier may Dedicate its best personnel to joint new product development Customise its products according to the customer s wishes Offer privileged treatment if bottlenecks in production occur Offer innovations first or even Enter into an exclusive agreement Standard customer Prefential resource allocation 1 Resource distribution with a supplier The best people, machines, ideas etc. of a supplier work for the preferred customer 2 Preferred customer Source: Steinle / Schiele (2008), p _Schiele Page 8

9 Preferred Customer Status has a significant and positiv effect on supplier innovativeness AND supplier pricing behaviour Model with results Research Supplier capability H 1 H ,367** 1) H 4 + Supplier innovativeness (R 2 =0,629) Survey high-tech firms from D/A/CH 219 buyer-supplier relations anaylsed Preferred customer H 5 H 2 H 5 + 0,505** 3) H 4 + 0,542** 2) H H 3 + 0,043 n.s. 3 H 2-0,103 n.s. Benevolent pricing Behaviour (R 2 =0,241) Conclusion Provided a firm has preferred customer status with the supplier, no fear for overcharging is justified We did not find any significant relatinship between innovative contribution and pricing ** p < 0,01 significance 1) f² effect size = 0,27 (medium), 2) f 2 = 0,58 (high), 3) f² = 0,15 (medium) Source: Schiele et al. (2012) _Schiele Page 10

10 In order to be a preferred customer, the supplier must - first of all - be satisfied with that particular customer Theory The way to preferrential treatment Social exchange theory Preferrential treatment 3) Status as preferred customer 2) Supplier satisfaction 1) Basic attractiveness customer _Schiele Page 11

11 Supplier satisfaction NEVI inkoopdag Agenda Twente Supplier satisfaction why? Supplier satisfaction how? Discussion Wrap-up _Schiele Page 12

12 Our research has revealed a consistent pattern explaining supplier satisfaction and eventually preferential treatment quite well Empirical research two contrasting firms May look like being complicated, but is not Source: Vos / Schiele / Hüttinger (2016) _Schiele Page 13

13 Upstream marketing means the purchasers selling their organisation to the supplier in order to convince them about future growth opportunities Action points upstream marketing Communication of growth potential Suppliers seem to appreciate those customers whom they expect to show a substantial growth in the future The perception of the buyer s innovation potential is an important antecedent influencing supplier s perception of growth opportunity Innovation potential Growth opportunity Implication: upstream marketing Communication to suppliers explaining the growth opportunities (buyers sell their company!) Systematic ordering of innovative goods (= future business for the supplier) Involving the supplier early on in product specification _Schiele Page 14

14 Reliability pays Action points reliable behaviour Ensuring morally impeccable behaviour by the buyers The strongest explanation of supplier satisfaction is at the same time the part a buyer can influence best: its behaviour towards the supplier A trustful and fair behaviour, itself influenced by the perceived support a supplier gets and the observed (contractual) reliability of the buyer strongly lead to satisfaction Support Reliability Relational behavior Implication: reliable behaviour Opportunistic behaviour does not seem lead to more than a very short term benefit Supplier needs to be sure that he can trust the buyer s word Successors need to know agreements The buyer s team profits from respective training and a conductive corporate culture (task for the CPO!) Goethe: Iphigenie auf Tauris (morally impeccable behaviour) _Schiele Page 15

15 Often suppliers seem to (mis-)interpret a lack of operational excellence as intentional Action points operative excellence Ensurance of operative excellence Operative excellence has a direct influence on supplier satisfaction: suppliers seem to perceive poor operative performance as malicious behaviour The other way round it appears to be possible to influence the perception of the supplier by providing impeccable service towards the supplier in simple and transparent processes Access to contacts Operative excellence Implication: operational execllence In order to avoid a misinterpretation by the supplier, it can be helpful to install purchasing systems, which ensure a service such as expected Documented processes, supportive IT systems, accurate planning, but also transparency (access to dedicated contacts!) can be the solution _Schiele Page 16

16 Depending on the way the suppliers see the customer, the latter may benefit from taking action to improve satisfaction and to profit from satisfied suppliers Conclusion: Situational approach (example of a firm project) 1. Measure satisfaction 2. Implement measures 3. Repeat assessment In the meantime, it is possible to measure supplier satisfaction in a reliable way To achieve honest results, a mediator (university) should be involved Depending on supplier s (dis-) satisfaction: Upstream marketing Buyer training Operational excellence If good: profit, e.g. through innovation workshops Repetition of supplier satisfaction assessment: achieve behavioural change with buyers Management approach, not simply a tool! _Schiele Page 17

17 Supplier satisfaction NEVI inkoopdag Agenda Twente Supplier satisfaction why? Supplier satisfaction how? Discussion Wrap-up _Schiele Page 18

18 In the following, each group is supposed to develop an account of arguments balancing pro and con arguments on a hypothesis and reaching a conclusion Acount of arguments PRO CONTRA CONCLUSION _Schiele Page 19

19 Discussion points A Supplier satisfaction is a game changer. Once the first buying firm starts securing its network, its competitors have to follow! B Assessing supplier satisfaction is the next step in purchasing maturity! C Upstream marketing is not feasible due to a completely different mindset of purchasers! D SMEs have no chance to ever become a preferred customer of their suppliers! _Schiele Page 20

20 Supplier satisfaction NEVI inkoopdag Agenda Twente Supplier satisfaction why? Supplier satisfaction how? Discussion Wrap-up _Schiele Page 21

21 Prof. Dr. Holger Schiele Universiteit Twente Chair of Technology Managment Innovation in Purchasing, Production and Logistics Hallenweg 17 NL 7522 NB Enschede _Schiele Page 22