I had a little laugh this morning when I read my print edition of the Financial Times. There was an article called, GM purchasing head is seeking to mend fences, explaining how the head of procurement, as of July, is trying to nurture supplier relations to support improved business performance. Apparently GM, when it used to receive suggestions for business improvement from its suppliers, would offer up 50% of the benefits for the first year to the supplier, and then keep all resulting benefits to itself.
Oddly, the head of procurement, who has spend most of his career in the GM procurement department, is pleasantly suppressed to see a rise in suggestions from suppliers, from an historical average of 206 a year to over 366 a month.
The reason for this turnaround in events? Well, the insightful head of procurement is now sharing 50% of the benefits with suppliers in perpetuity. Amazing. Who would have thought that suppliers would behave that way? Surely we need to write a case study or some management thesis or book. Well done chap.