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Supplying Principles and Practices > USPS Supplying Practices Process Step 2: Evaluate Sources > Involve Suppliers in Planning
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
• Communication
• Purchase/SCM Team project-level expertise
• Well-documented and understood guidelines
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.
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
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
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.
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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