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Involve Suppliers in Planning

Supplier involvement can be a key element to successful supply chain management. During the Conceptualize Need task in Process Step 1: Identify Needs, the Purchase/SCM Team assessed the supplier community's perspectives on whether and how an outcome can be achieved. Maintaining supplier involvement furthers Postal Service by reducing costs and time to market, increasing quality, and creating stronger ties with suppliers. The difference between Early Supplier Involvement (ESI) and Involving Suppliers in Planning is in focus. In the earlier practice the Postal Service sought the marketplace's insight and opinions on whether a requirement was feasible; during this task, the Postal Service seeks the marketplace's insight in obtaining best value.

Supplier involvement during planning aids the determination of the type and content of the product or service sought and how the need can best be communicated to the supplier community (statement of objectives [SOO]), statement of work [SOW]), specifications, product descriptions). The elements necessary to successfully involving suppliers during planning are:

Identification of the right suppliers


Purchase/SCM Team project-level expertise

Well-documented and understood guidelines

Identification of the Right Suppliers

The first step in supplier involvement is identifying suppliers that can contribute to planning. Numerous methods are available for identifying the pool of possible suppliers, most of which are chosen based on the Postal Service's history with existing suppliers. Information generated from participation in early supplier involvement, responses to requests for information (RFIs), past performance, and market research can be particularly useful to the identification.

The suppliers involved should have the most up-to-date expertise/capabilities with regard to the purchase. The depth of the suppliers' knowledge of products or services will vary, so proper identification is crucial.

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Care must be taken to ensure that these conversations are not perceived to be the promise of a future contract. Effective communication is required among the Purchase/SCM Team, suppliers, and any other members of the Postal Service involved. Communication is imperative for the suppliers to effectively contribute; it enables the Purchase/SCM Team to:

Understand, collate, and analyze what is heard from suppliers

Engage with suppliers as equals and partners, taking their thoughts and advice into consideration while retaining authority over the process as a whole

Impart the results of supplier involvement to others clearly and effectively

Share information among the project's participants

Purchase/SCM Team Project-Level Expertise

Once capable suppliers are chosen to participate in planning activities, the goal is for them to validate the feasibility of the purchase and to generate quality, cost, and cycle time improvements. To achieve success, the Purchase/SCM Team must:

Welcome and listen to suppliers' ideas

Compare and contrast the information received from the suppliers to form an accurate overall impression

Translate outcomes into requirements in a way that is meaningful

Maintain good working relationships with other departments

Demonstrate strong interpersonal and leadership skills

Cultivate a working knowledge of technology and processes

Understand existing and potential suppliers

Understand which aspects of the requirement are variable and which are fixed

The Purchase/SCM Team's knowledge of the requirement drives supplier influence. It is crucial to understand the implications of supplier feedback, and the Purchase/SCM Team must develop an adequate level of expertise to enable an effective working relationship with suppliers and internal cross-functional team members. Members must have enough expertise to ensure that suppliers' proprietary solutions do not become central to the success of the purchase if doing so will harm the Postal Service's business and competitive interests.

As a result of involving suppliers in planning, a supplier`s ideas may be incorporated into the designing, testing, engineering, manufacturing, and implementation of the purchase, and may result in inviting suppliers' engineers into the Postal Service's own engineering departments. Successful supplier involvement may lead to:

Developing new custom items with benefits of cost, quality, functionality, and cycle times

Developing partnerships and long-term agreements with suppliers

Designing out any waste and unnecessary features and functions (value engineering)

Substitutions based on what the Postal Service is currently using

Substitutions of standard items for parts/material/services with unique specifications

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Well-Documented and Understood Guidelines

It is essential that the Purchase/SCM Team understands its roles and responsibilities when suppliers are involved in planning. The Purchase/SCM Team should prepare for the involvement by discussing and documenting the guidelines it will follow throughout its interaction with the supplier community, and the Team must be aware of the Postal Service's strategies and objectives when deciding what information suppliers will be provided with, and the information that will be sought from them. In addition, procedures for the interaction should be documented and well understood among the team members. The following should be considered:

The desired outcome and its strategic importance

Techniques for handling any initial and follow-up queries

Awareness of precisely what suppliers can provide

Understanding of what changes mean to project and/or program

Information from suppliers will be generated during this task, so it is also essential that all team members realize that, as a good business practice and as required by law, it is imperative to ensure that suppliers' business-sensitive or proprietary data is not divulged to a third party or to Postal Service employees outside of the Purchase/SCM Team. Additional information can be found in the Clarify Data Rights and Intellectual Property Issues topic of the Develop Sourcing Strategy task of Process Step 2: Evaluate Sources and the Privacy Considerations (e.g., FOIA) topic of the General Practices.

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Other Topics Considered

Conduct Market Research and Benchmarking Analysis topic, Decide on Make vs. Buy task, Process Step 1: Identify Needs

Develop, Issue, and Analyze Responses from RFI topic, Decide on Make vs. Buy task, Process Step 1: Identify Needs

Involve Suppliers Early topic, Conceptualize Need task, Process Step 1: Identify Needs

Start Preliminary Request for Proposals (RFP) Development topic, Prepare Project task, Process Step 2: Evaluate Sources

Clarify Data Rights and Intellectual Property Issues topic, Develop Sourcing Strategy task, Process Step 2: Evaluate Sources

Privacy Considerations topic, General Practices

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