THE KNOWLEDGE 2
BUYER PERSPECTIVE Caroline Strachan, global commercial leader, business travel, AstraZeneca
DON'T FORGET TO MANAGE THE SUPPLIER CONTRACT
Caroline Strachan suggests how to get the most out of buyer-supplier deals and relationships
they’re equally important but, all too often, equal time and resources are not applied. In some organisations it’s all about negotiating the deal and forgetting that a piece of paper (the contract) is worthless unless you manage and drive the supplier. At AstraZeneca we use a robust sourcing
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and supplier management framework to ensure we drive consistent application of process, improve governance and ensure all of the extra commercial value negotiated is actually realised. So how do we do this? Our first step is supplier
Caroline Strachan, Global Commercial Leader, AstraZeneca
Caroline leads both the supply and demand of travel
services globally for AstraZeneca. Over the past four years she has transformed its travel programme to a totally out-
sourced regional and global programme, which is often cited as best in class. Caroline has 20 years travel and meetings industry experience, in the
earlier years working on the supplier side for the likes of BTI and American Express. More
recently she has moved to the
corporate side and been instrumental in creating travel
programmes at both Yahoo! and Cisco.
categorisation. We tier our suppliers into strategic, core and commodity and ensure we spend the most effort with those that provide the greatest return, ie strategic. After all, we only have a certain number of hours in the day. Our second step is to
agree a governance model with the suppliers in each of the tiers. For instance, our strategic supplier for travel is our TMC. The governance model operates on four levels: executive; global; regional and local. The executive level ensures bi-annual dialogue at a senior level to help drive satisfaction
hat’s more important: negotiating the supplier contract or managing the supplier/contract? I'd say
and ideas for both parties. The global level is how we steer the ship, what our strategy is, how we are performing (both sides, not just the supplier) and what risks we need to manage. The regional level gets more specific and into
the activity planning and metrics. Finally, the operational level is very day-to-day and ensures ultimate delivery of contracted services. You may simply need strategic and operational levels – this all depends on your company and programme. Now you can actively use the model! I’d
recommend you agree the content together with your supplier. For each of our suppliers we have a structured agenda that follows this generic outline: • AstraZeneca company update • Supplier company/product update • Travel service updates. To demonstrate our strength of programme and ability to deliver on promises. This section also includes feedback from our travel agents and travellers • Performance/metrics (tracked on a scorecard) This approach ensures you can move away
from low value 'tea and a chat' meetings to high value business meetings that drive value for both parties. My team finds this structure provides consistent performance and therefore releases you from the tactical and elevates your role back into where it belongs: business engagement (but that’s a whole other topic!). I rather hope that part of the success of our
travel programme is due to the excellent supplier relationships we have fostered over the years. We respect our suppliers and keep them engaged through our supplier management process but we also look at suppliers as a unique 'stakeholder group' in our communication planning. For example, if we have a major company or programme announcement to our travellers it goes to our suppliers at the same time. Once you’ve mastered supplier management
I’d recommend you look at some 'supplier development' techniques. For example, in 2012 we ran a 'best practise contract value management' exercise with our TMC across
“My role has become more of a PR manager for my suppliers, helping them interpret the good work they do into demonstrable value versus highlighting underperformance”
nine critical elements (such as ongoing business assurance, performance management etc). The results were key in helping us understand what work we need to do to further improve our partnership and to celebrate the successes, but more importantly to fill the gaps. I firmly believe supplier management is both
an art and a science. One of my key learning’s over the years has been that most suppliers do not know how to shine! My role has become more of a PR manager for my suppliers, helping them interpret the good work they do into demonstrable value versus highlighting underperformance, which most suppliers are the first to admit!
08 THE BUSINESS TRAVEL MAGAZINE
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