Failure to deliver can result in suppliers entering a blacklist that excludes them from opportunities to win future business, SM can reveal.
In the latest SM100 poll, procurement professionals were asked: “Do you have a supplier blacklist?” In response, 28 per cent said they operate such a policy. Those blacklisted include suppliers that have failed on grounds such as contract delivery, financial stability or had been found guilty of illegal acts such as fraud.
Martin Wakelin, purchasing director – global elastomers at Trelleborg Sealing Solutions, told SM: “We don’t call it a blacklist, but all our managed suppliers are categorised as ‘preferred’, ‘approved’, ‘hold’ or ‘exit’. If we identify risk/poor performance with a given supplier we flag them as ‘hold’. If we see ongoing concerns they will be moved to ‘exit’.
“The ‘hold’ position is implemented on our ERP [enterprise resource planning] system to inflict the punishment of no future orders.” The survey findings suggest, however, that blacklists are not common practice – 72 per cent said their company does not hold such a list.
Gary Moore, procurement performance manager of defence information, training and services at BAE, said that while he did not use a blacklist, there were other ways of weeding out undesirable suppliers.
He told SM: “Standard measures such as delivery performance and financial stability will mean undesirable suppliers self-select out of contention. The next step is to ensure such data is shared across whatever organisation you work in so you gain a consistent picture of a supplier.”
Brian Grew, vice president of commercial at Live Nation, said that while action should be taken against suppliers that fail to deliver, he does not use a blacklist. “While there are pragmatic and valid reasons to begin on a course to manage the supply base, a blacklist perhaps isn’t the best way,” he said.
29 October 2012 | Adam Leach, Supplier Management