What is it?
- Insufficient definition of requirements in the supply chain
Companies fail to create a common understanding of exactly what they are buying or outsourcing, the strategic objectives (why?) behind the move, and how the success will be measured in the long and medium term.
- Sketchy supplier market knowledge
Companies base their decisions on a sketchy understanding of key supplier market dynamics.
- Lack of trained manpower dedicated to the task
Manpower is either not available, not seconded for sufficient time, or not trained sufficiently for professional tender management.
- Lack of a vision of future state of affairs causing unrealistic expectations
Because there is no common vision of the future state of affairs, different stakeholders in the supply chain have different views of how things will work. In most cases there is conflict between these various visions – and unrealistic expectations of the future state.
- Lack of internal agreement onselection criteria
Without an explicit pre-agreement on selection criteria for the winning tenderer, many companies fall into the trap of making decisions on the fly based on what appeals at the moment to the majority of people in the room. Many important strategy-supporting criteria are often overlooked, or underweighted in the process.
- Insufficient rigour for proper corporate governance
The tender process is not explicitly defined and properly adhered to. The exit strategy is not sufficiently incorporated in the tender process. Finally, long term supplier management is not sufficiently incorporated into the process to manage the relationship strategically.