Procurement Under Pressure Webinar
John Cody:
Good morning, good afternoon, everyone. We’re excited to kick off today’s webinar. We’ll allow just a minute or two for more attendees to join.
Thank you so much for being here for our “Procurement Under Pressure” webinar. We’re thrilled to be joined by Michael Thomas Goodwin and our CEO, Vishy Visweswaran. With that, I’ll hand it over to Vishy to get us started.
Vishy Visweswaran:
Thank you, John. Welcome, everyone, and thank you for joining. Procurement leaders today face a perfect storm—tariffs, rising costs, supply disruptions, inflation. In this environment, supplier performance isn’t just about cost and compliance anymore—it’s about resilience, agility, and alignment.
That’s why I’m particularly excited to welcome Michael Thomas, who leads partner and supplier management at ServiceNow. Previously, Michael built and led the responsible sourcing and supplier management function at Discover Financial Services. He brings a rare blend of experience across procurement, tech, product, and risk—making him uniquely qualified to speak to today’s challenges. Michael, welcome.
Michael Thomas:
Thank you so much, Vishy. I’m excited to be here with the SupplyHive team. You’re on the cutting edge of supplier performance management, and I always learn something new when I talk to you.
Vishy Visweswaran:
Thank you, Michael. Let’s jump in. Today’s conversation will be structured around three sections:
- Defining supplier performance and best practices
- Managing and identifying risk
- Strengthening supplier partnerships and becoming a customer of choice
We’ll also reserve time for audience Q&A. So, Michael—starting at the top, what does supplier performance mean to you today? What defines a high-performing supplier?
Michael Thomas:
Great question. At the most basic level, suppliers need to meet contractual obligations, adhere to SLAs, be responsive, deliver on time, and maintain high quality. But high performers go beyond that. They identify problems, propose solutions, and proactively improve productivity through automation or innovation.
High-performing suppliers also deliver value beyond the contract. And importantly, you need to measure not just performance data, but sentiment. How do internal teams feel about the supplier? That’s just as critical. I worked with a supplier that launched its own voice-of-the-customer survey, built an action plan, and reported back annually. That’s a partner.
Vishy Visweswaran:
That’s a great example. On the flip side—what happens when a supplier underperforms? Can you share how you’ve turned those situations around?
Michael Thomas:
Sure. When a supplier underperforms, there’s a ripple effect—services falter, launches delay, even facilities may not be cleaned properly. First, clearly define the issue and separate out concerns so you can track progress.
Explain the business impact clearly when talking to the supplier’s team. Understand root causes and create a structured action plan, complete with timelines and executive sponsorship. Be relentless in follow-up and accountability.
Vishy Visweswaran:
That brings up a critical point—procurement teams are stretched thin. How do you stay on top of performance management?
Michael Thomas:
Technology is key. Suppliers actually want structure and consistency. Platforms like SupplyHive use AI to identify issues and generate action plans, streamlining follow-ups and reminders. Even simple tools like email reminders can help if you don’t have a dedicated solution. Automate where you can.
Vishy Visweswaran:
Let’s talk about KPIs. Traditionally, teams focus heavily on cost, quality, and on-time delivery. But from our data, we’re seeing that behaviors—like communication, consistency, and responsiveness—are actually stronger predictors of future performance. Thoughts?
Michael Thomas:
Completely agree. Cost and quality are lagging indicators. But if you see an abrupt change in responsiveness or personnel, that’s a red flag. Media monitoring is also helpful—issues at one customer might repeat at yours. Watch those patterns closely.
Vishy Visweswaran:
Let’s talk business reviews. What makes them impactful?
Michael Thomas:
Think in three phases:
- Before: Carefully select attendees, share materials early, and align on the agenda.
- During: Encourage open conversation, clearly define action items with timelines.
- After: Distribute minutes, track action items, propose improvements, and schedule the next review.
Also, tailor your reviews. A tech supplier’s review will look different from a marketing agency’s.
Vishy Visweswaran:
Let’s dig into scale. Many companies do great with their top 25–50 suppliers. But how do you extend performance management across hundreds of vendors?
Michael Thomas:
Use segmentation—treat top-tier suppliers differently from mid- and low-tier ones. But don’t ignore the lower tiers. Even an annual review or semi-annual scorecard can uncover risks or opportunities. Technology can help scale these efforts meaningfully.
Vishy Visweswaran:
Exactly. It’s not one-size-fits-all, but you do need consistent standards. Let’s shift gears and talk risk. Michael, how have your methods for identifying supplier risk evolved recently?
Michael Thomas:
Highly regulated industries follow risk frameworks like IMMR—Identify, Measure, Manage, Monitor, and Report. That hasn’t changed much. But what’s new is a bigger emphasis on leading indicators—like operational changes or media alerts—that flag risks before traditional metrics do.
Vishy Visweswaran:
Tariffs are top of mind. Do lessons from COVID help us prepare better this time?
Michael Thomas:
Yes. With COVID, we were reacting. With tariffs, we can prepare. Start with supplier surveys to understand exposure. Monitor financial health. Build contingency plans. Engage stakeholders early—no surprises for leadership.
Vishy Visweswaran:
Is this also a chance to right-size contracts and KPIs?
Michael Thomas:
Absolutely. Don’t waste a good crisis. Review your SLAs and KPIs. Make sure you’re measuring the right things—not just everything. And get price protection clauses into new and renewed contracts to hedge against volatility.
Vishy Visweswaran:
What are your red flags when it comes to risk signals?
Michael Thomas:
One story stands out. We had a niche provider who was always “yellow” on our scorecard—especially on financial health. We built an exit plan, onboarded a backup, and slowly shifted volume. Eventually, the provider went under, but we were already transitioned. It was a textbook example of proactive risk management.
Vishy Visweswaran:
Let’s pivot to supplier partnerships. How do you become a “customer of choice”?
Michael Thomas:
You become a customer of choice by being collaborative, not transactional. Strong partners get your A-team, access to roadmaps, and first looks at new offerings. One supplier once proactively brought us a solution to a challenge we hadn’t even formally addressed yet. That’s partnership.
Vishy Visweswaran:
How do you encourage innovation from suppliers?
Michael Thomas:
Start with strategic discussion during business reviews. Ask suppliers to bring ideas. In a mature function, have an intake process—review, pilot, track results. Innovation should be part of your performance management scorecard.
Vishy Visweswaran:
And the voice of the supplier?
Michael Thomas:
Critical. Issue an annual survey to your top suppliers. Ask: What’s it like to work with us? What can we improve? These insights often reveal internal process inefficiencies. And when you act on the feedback, it builds trust and shows suppliers you value the relationship.
Vishy Visweswaran:
Final thought—set expectations at the start of the relationship, right?
Michael Thomas:
Exactly. At onboarding or contract renewal, share a one-pager that outlines your performance management framework. It sets the tone and avoids surprises later.
Vishy Visweswaran:
Thank you, Michael. And thanks to everyone who joined us today. A video recording of today’s webinar will be emailed and posted on our website. We hope you’re walking away with practical insights and renewed perspective on supplier performance. Until next time—stay resilient, stay connected.
Michael Thomas:
Thank you all. It’s been a pleasure.