Vendor Management Principles Can Bring Results on the Warehouse Floor

Published : October 16, 2015

Supply Chain Team Motivation

Businesses can borrow a lot of innovation from themselves: Processes that work well in some sectors are, with a little ingenuity, easily extended to others. Some best practices can, and should, be applied throughout your organization. Take vendor management, for example. The way you treat your vendors should be similar to the way you treat your staff. This doesn't mean you should bark orders at your supply chain partners, but, rather, that you should strengthen and maintain your relationships with the men and women running your fulfillment center.

Here's how you can motivate your team through some borrowed vendor principles:

Don't Allow Stagnation

Whether an employee has been with your company a few weeks or a few years, they should still feel like a valuable component to your success. As Frank McGuigan urges in Talking Logistics, your partners—vendors and employees alike—should be considered a fertile ground for innovative ideas. Your staff has more first-hand knowledge of your shipping and receiving than anyone else inside or outside of the company, so if you aren't picking their brain already, it's high time to start doing so. Make a commitment to frequent conversations with them and encourage brainstorming sessions during lulls in orders. You may be surprised at the number of profit-improving ideas that can be found right at the ground floor. After all, the closer a mechanic is to the heart of the machine, the better he or she understands it. 

Avoid "Commoditization" 

In the same vein as stagnation, commoditization is a fast way to take the wind out of a productive team's proverbial sails. Treating an employee or vendor as a means to an end rather than a vital component to overall success is one of the fastest ways to damage productivity. If an employee doesn't feel trusted or valued, he or she isn't as likely to go above and beyond on the job, and connected attributes such as creativity, productivity and commitment may decrease, according to a Harvard Business Review study by Teresa Amabile and Steven J. Kramer. Remember, just as your vendors can sell to a competitor, so can your prize employees work for them. Make sure you're giving them a reason to stick around and boost your outlook, rather than someone else's. 

Have the Right Kind of Encouragement in Place

Without a perceived incentive waiting in the wings, a supply chain partner has no reason to align their results with your scorecard. Vendor management and its associated best practices deal just as much with keeping the train on the track as initially establishing a track for it to follow. If your team isn't living up to the metrics or milestones you've stated, you may need to reinforce your motivational incentives. Is your current bonus and reward structure actually enough to motivate your staff (or supplier) to work harder? At what point do you need to take some form of punitive measure? If you don't have honest answers for these scenarios, trust that your team likely knows that as well. You need to walk a fine balance between motivating through rewarding goals and performance reviews. As Justin Brown explains in Supply Chain Quarterly, corrective action is not only effective, it's sometimes the only route a frustrated supply chain manager is left with, when faced with a nonconforming vendor.

Ultimately, employees aren't vendors, but they will make similar demands of you—your effort, your time and your flexibility in exchange for the products and/or services they are best equipped to provide. If your vendor management is working but your employee management strategies are not, don't hesitate to crib your own notes on best practices to find the solution you've been searching for. 

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Topics: Vendor Management

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