The attraction of buyers and suppliers is simple and clear - suppliers have something to sell, and buyers have a need to buy. On the other hand, there is a division between [most] suppliers and buyers - the buyer would like to make an informed purchase using data to mitigate the risks of trading cash for commodities, while the supplier would like to close the transaction without divulging too much information.
This is the heart of the conflict within supplier relationship management. Of course, the supplier will give some information to appease the buyer, but may at some point walk away from the deal in search of a more agreeable sale.
If the buyer happens to have a lot of buying power, the attraction to the seller may overwhelm the resistance to provide the requested information. However, (in most cases that matter) the buyer and seller are well balanced and either is poised to walk away from negotiations in search of other resources. Given this balance of power, there is a need for balance in designing a supplier profile questionnaire. If the questionnaire is too long, suppliers will give up and walk away. If the questionnaire is too short, it can be difficult to adequately assess the risk of engaging the supplier.
At some point, the profile questionnaire ends, and sourcing begins, followed by the remainder of the Supplier Performance Management cycle, which is how additional information is aquired in order to complete a supplier risk assessment and management program.
The question is, how much information do you request from suppliers in the profile questionnaire?
Some additional points to consider:
- What if the engagement is simply an NDA or RFI versus a full-on five-year high-risk engagement (security, privacy, etc.)?
- If you only ask a few questions, how / where do you get the additional information to adequately assess the supplier’s risk?
- If you ask a lot of questions, do you experience suppliers that walk away before even completing their profile?
- If you use other methods to collect supplier data, what are they?