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Leaps of faith – your supplier mix strategy

By Silky Agarwal
In Procurement Technology
Apr 8th, 2014

Procurement teams in buying organizations are quite familiar with the broad three types of purchases: the new task buying, the repeat task buying, the modified task buyingWhen it comes to these different types of purchase decisions, what we think of our suppliers and how much of a choice-dilemma we experience, depends in some part, on the relative importance and relevance of the supplier’s brand versus the supplier’s relationship with us.

All the brand elements of the supplier are things that are external or public indicators – the various buyer ratings, the supplier stock performances, the global depth and reach, the media coverage, the professional institution certifications, the brand appearance and the privileged customer mix consisting of big brands.

On the other hand, all the affective elements are those that are self-perceived, not easily quantifiable, quite complex, and operating more on intuitive and emotional levels – a personal favorite with me!  Past experiences, responsiveness, one-on-one communications, personal champions within the supplier organization, courtesy pricing and a general comfort level are the kind of things here that make us feel ‘at home’ with a given supplier or vendor

Supplier Mix Strategy

Such a dilemma in making a supplier choice doesn’t raise its tiny little hands until a change in the status quo is imminent – when a ‘new’ or a ‘modified’ task buying project is placed at your desk.  Brands, then, I would claim, are nothing but mental short-cuts; heuristics that help us quickly perceive a sense of warranty against risk.  It makes us feel, “so many people couldn’t be wrong” and hence pushes us to walk among the large herd of sheep.  But, if you are bold, and believe in ‘taking you decisions and making them right’, then you will be willing to take a leap of faith and to favor affective elements over brand.  There is both personal risk and organizational risk here in and that would awaken the commitment nerve within the decision maker – to prove the partnership successful, take things in control, and to surprise the non-believers.  Going with a strong brand, well, that’s more about leaving things to ‘averages’ and to ‘best practices’.   But if you like being excited about bringing ‘next-practices’ and creating new ‘benchmarks’, don’t be afraid to take that leap of faith!


About "" Has 26 Posts

Silky works as part of Zycus' thought leadership team. She loves to bring interesting perspectives to the procurement profession, thereby providing food for thought to leaders and visionaries in this profession driven to make a difference to their organizations. She is an MBA in Communications Management, a Graduate in Mass Communications. Her specialization lies in Qualitative aspects of the business and the market needs.

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