RAPIDRATINGS BLOG

RapidRatings for Sourcing & Category Managers: Where Relationships Begin & End

Posted by RapidRatings on December 24, 2020
 
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Depending on who you are, this may be the least (or most) interesting email you get in your inbox on any given day:

Hot-Rolled Steel is currently selling for about $935 per ton (up $125 since Dec.1), the highest price since Sept. 2008.

A severe domestic supply shortage, coupled with a virtual absence of competition from imports, is exerting extreme upwards pressure on prices.

Cold-Rolled is following suit, approaching $1,100 per ton.[1]

 

Three simple lines—haiku-like, in their starkness—can convey a ton of meaning and imply a lot (depending on who you are).

For the right audience, the above might mean you have to call your steel rep. Check to see if the price reduction you received (last quarter) will be grandfathered into the new year. Ask if they think (whether or not) the steel or iron markets will collapse. Reconcile conflicting pieces of information. Try to cut a deal.

But maybe steel isn’t your thing. Maybe it’s rare earth metals or plastics or annealed glass or bananas. In any case—it’s a relationship-based game and you need to collaborate closely with the suppliers (public and private) whom you’ve spent months, years, and decades building rapport.

Sourcing and category managers are highly specialized for a reason.

You have to go deep. Ask the right questions. Get a pulse. Sometimes to the extent that you feel wholly connected to your suppliers’ motivations, milestones, or even distress.

Because it’s not just about the divisions or materials or products under your remit—but the relationships that come with them.

Both The FHR® and The FHR® Network are intentionally designed to support your supplier relationships through foundational (and consistent) elements of trust:

  • Language—use a common, data-based language that objectively assigns a score from 0-100 to better understand how your supplier is doing in the moment and where they might be in the medium or far terms (and also where your organization might be able to help)

  • Context—pull portfolio risk, benchmarking, or comparison reports to identify deterioration or improvement, mitigate disruption, and collaborate with your finance, procurement, and risk management teams—with or without financial expertise

  • Consensus—help your preferred suppliers communicate their financial positions clearly and make them stickier across your internal departments via secure and trustworthy financial statements, provided directly from them

 

Now, more than ever, you’re challenged with extracting new value from critical partnerships across your supply chain(s).

But value isn’t just transactional. It’s also about mutual benefit and interdependence—in building long-term resiliency and deeper, more meaningful business relationships. And you can’t do that if your private company suppliers disappear overnight or aren’t yet equipped to ask for help.

Download our Supplier Dialogue guide, read about The FHR® Network, or request a free FHR® Report to learn more.

And don’t forget to call your steel rep (if you have one), it’s the holidays after all.

 


[1] ProPurchaser commodities, https://propurchaser.com/

 

Topics: Supplier Risk Management, Risk Assessment