Supply Side Follies

To supply or not to supply ... that is the question. And it's a question to which many suppliers are unwittingly responding in the negative by their refusal to embrace the new Digital Age.

[From iSource Business, March 2001] In a world where technology is shifting business processes at warp speed, the reaction of too many suppliers is on the scale of a Shakespearean tragedy. In effect, these providers of goods and services are ensuring that, in an era where tomorrow is happening today, they will not continue to be viable entities.

Technology is transforming the entire customer/supplier relationship. Corporations are briskly adopting online auctions, Net markets and other e-supply chain tools to ensure that they are obtaining all the inherent benefits of the Digital Economy.

Instead of embracing these changes and defining the potential opportunities, many product and service suppliers are responding to the New Economy like pouty children who don't get their way. Perhaps more frightening, some procurement professionals respond by "giving in" to suppliers that refuse to play by the new rules.

A significant number of individuals have recently posed the question, "What if the supplier doesn't want to ...?" To which the only response is, "If the supplier doesn't want to play by your rules, then do you really want them in your backyard at all?"

Looking back at the history of the buy-sell relationship, the evolution was never consistently easy. It used to be an accepted practice to "seal the deal" with a handshake or what was commonly referred to as a "gentlemen's agreement." The push for written commitments and purchase orders was initially seen as an affront to the integrity of either the buyer or the supplier. Cries of, "Isn't my word good enough anymore?" probably echoed from the rooftops. And, assuredly, there were companies who walked away from potentially lucrative opportunities because they couldn't rationalize this new business practice. Yet, today no one could fathom doing business without documentation.

What about faxes and EDI? I recall the pushback from suppliers toward the concept of EDI in the late 1980s becaue of the fear that the system would go down; that there was only an electronic trail and not a paper trail, as well as many other fear-mongering "what ifs" that were put forward. Many procurement professionals also bought into the fear-mongering, but in a few years this new method of completing transactions was again adopted as the accepted way of doing business.

P-cards have traversed the same historic path as EDI. And today, the move toward all the available e-tools is causing the same, anxious hand wringing.

The tools of the past and those of today have been implemented for sound business reasons  not just because corporations like to keep changing the rules. The need for efficiencies, reduced product and service costs, supply market intelligence, tighter timelines, and a plethora of other compelling reasons are driving the requirements.

So, if you're a procurement professional who encounters a supplier who doesn't want to adopt your new method of doing business, or if you're a supplier who has been successful to date in persuading customers that you can't or won't do business in the new digital format, just remember the science of Darwin and the survival of the fittest.

In fact, you may wish to keep in mind the fate of poor Yoric.