ABSTRACT
This chapter emphasized the importance and benefits of creating and maintaining good supplier relationships. The formal supplier relationship management (SRM) approach is described in detail. SRM is a key element of Cornerstone Four: Manage and Refresh. SRM is a strategic supplier development approach that includes all activities directed toward developing collaborative and proactive working relationships with key sources and provides a flexible communication structure that encourages insights and innovation, which are translated into business process and service delivery improvements for both parties. It is also one of five main roles that coordinate the management of a sourcing solution.
The process for managing debarment and suspension of suppliers is examined, including the entity’s role in reincorporating suppliers as a demonstration of impartiality. Exit management, including strategies to transition to a new supplier resulting from performance default, non-renewal, or early termination is reviewed. Key strategies to ensure a smooth transition are provided, including requiring bonding, providing policy and procedure for rescinding and re-awarding, and the proactive steps a procurement professional can take to anticipate non-renewal.
The importance of documenting the lessons learned in exit management is emphasized as a means for the entity to benefit from resulting refreshed policy and procedure, and to also improve similar sourcing projects as a continuous cycle. Finally, several strategic approaches to managing disposition of surplus material in exit management are presented for consideration by the entity for incorporation into policy, procedure, and contract, as well as their relation to the Four Cornerstones. The strategies include transfer, donation, recycling, surplus sale, and calculated surplus as a contract deliverable.
