How to Resolve Issues in Supplier Relationships.
June 28, 2016
Darragh Toolan
1 minute

Let’s be realistic for a moment, issues will exist in every relationship you enter into. Whether it’s a marriage or a commercial relationship, partnerships create expectations and unfulfilled expectations lead to conflict. It is inevitable.

The most important elements of issue resolution is understanding that conflict will occur, being able to identify them in a timely manner and having a process for responding to them. As the Greek Stoic philosopher Epictetus claimed

“it’s not what happens to you, it’s how you react to it that matters.”

The same old approach won’t work.

In a strategic commercial relationship, conflict must be managed differently to the way it is in a traditional transactional buyer / supplier relationship. The ongoing collaborative nature of these relationships means the conflict has to be resolved in a way that leaves both parties satisfied with the outcome in order to maintain the future working state. You can’t simply wait for the conflict to dissipate, as the underlying issues will continue to undermine the productivity of your partnership. For more information on this read our blog on Are you treating your suppliers like rug salesmen?

Once again, the Statement of Intent is a great source of inspiration for resolving conflicts. By reframing the disagreement in the context of this statement and the objectives it outlines, team members are able to qualify the problem and how it relates to the overall goals of relationship. By using the Statement of Intent as a reference point when tough decisions need to be made, the process of issue resolution is sped along greatly.

A conflict should initially be addressed within the peer-to-peer group (find out more about these by downloading our whitepaper on governance) that has uncovered it. If it is not possible to settle the dispute within this group then an escalation process should follow. Issues that can’t be resolved by operational staff should be escalated at regional level. If these issues are not resolved at the regional level they should be escalated again to the global team and ultimately to the highest instance that governs the relationship.

Below and an example of a similar process from the book ‘Getting to We’.

issue resolution

To learn more about issue resolution and governance in strategic supplier relationships, download out free whitepaper on the topic below.

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