At the end of the day, I always work with the assumption that everyone is trying to do a good job. It’s always going to be a vendor-client relationship, but the less you make that apparent on a day-to-day basis, the better. In your contract, set it in writing that you and your leadership team will treat the vendor with the same attitude as you do your own employees. You must provide the same level of trust in them and belief in their abilities and innovation. At Panasonic, we also simplified the penalties to reflect our internal practices. Instead of having a complex formula to determine the penalties if a goal slipped or satisfaction went down, now, as with my own staff, I will work with the vendor to fix that. But, if they make the same mistake again, there are high penalties.
It’s never a good idea to micromanage, and once you go global, it is simply not possible. You’ve got to have confidence in your vendor’s lead managers. I personally interview all of the managers, and I have included in our contract the condition that I have the power to change out anyone on the vendor’s management team if they don’t fit Panasonic’s needs. But be cautious about exercising that power; don’t undercut the authority of your own staff members in direct contact with the vendors.
Within the IT group, I established the position of supplier relationship manager and dedicated people in this role to 20 of our global suppliers. These are staff members who have very good people skills, know and understand technology, have honed their negotiation skills and generally serve as "conductors". We’ve found people to play this role from various parts of the enterprise, such as purchasing and engineering, but we’ve also had to conduct external searches for this hard-to-find mix of skills. The key to finding them is not to look for the whole package. We look for talent in two out of the three areas, and then train them on the third.
I have also built Roche IT supplier management groups, which include the relationship managers, so that no matter where they are around the globe, they report directly to my position, not to central procurement. That structure ensures that all negotiations with our suppliers go through us and result in proper operational execution.