How to STOP Supplier Mistreatment
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By Morgan International Staff Writers
In any relationship, personal or professional, there is a balance of power. In positive and productive supplier relationships, neither party abuses a power imbalance. Put simply, the larger organisations should not bully smaller organisations. However very often the giants do come under fire for alleged supplier mistreatment. For example, Amazon are facing a €10m fine from the French Ministry for the Economy for supplier mistreatment. Amazon are not alone – each year many businesses face fresh accusations. So how do we prevent supplier mistreatment?
What about Strategic Relationships?
Over the past few years there has been extensive conversation about a move from transactional and tactical buyer/supplier relationships, to long term strategic unions. The argument has been that the benefits from the latter will outweigh the former. But in a time when customers are demanding products faster and cheaper – is it of any great surprise that some organisations are pushing their own suppliers harder than ever?
Large organisations who abuse their power to bully smaller vendors should be penalised. In some countries that action will be taken through the courts. In other countries there is legislation protecting the construction of unfair contracts in the first place. This is a useful deterrent. So the government and regulators have a fundamental role to play. Second, organisations of all sizes must continue to be educated about productive relationships with each other. But thirdly, and perhaps somewhat controversially, as customers we must support organisations doing the right thing.
Supplier abuse has been happening since trade begun. There is no one answer to stamp it out. It requires action and responsibility from a number of parties. Within organisations of all sizes, where possible it is important to have a Supply Chain Manager overseeing the construction of contracts to ensure they are robust, and most importantly fair.