In this critical thinking essay, we are going to describe a possible variant of how to deal with problems with suppliers. The main task is to provide the best solution to the existing problem and maintain professional relationships with the supplier company. In order to provide the reasonable solution, we are going to brainstorm on the following areas – goals, trades, alternatives, relationships, expected outcome, consequences of winning or losing, power, possible solutions.
The task of a project manager is to deal with all the aspects of company’s relationships. Jim Lewis defined a project manager as a person who takes a responsibility to complete a project in time, within allocated money, and with the goal achieved (Wysocki, 2011). In order to achieve these goals, they should be set properly. However, a company has to predict every possible scenario in the contract between the manufacturing company and a company of a supplier. In order to build strong professional relationships with supplier and maintain them the company has to hold to the following principles:
Treat a supplier as well as clients of the company.
Do not forget to show in practice the common interests.
Familiarize the supplier with the objectives of the company and be aware of its business operations.
Demonstrate a willingness to compromise in case of supplier problems.
Follow the obligations assumed.
Take into account the interests of the supplier.
Maintain possible steady contacts in the business sector.
1. The goal. The first question that can be put here is, what is an expectation a project manager wants to achieve after the negotiation on the existing problem? As well as, what are the expectations of a supplier’s company? (‘Win-Win Negotiation: Finding a Fair Compromise’, 2016). As the company got defects in 25% of the chips shipped, the main goal of the project manager is to deal with the problem without great loss in any of areas (money, professional relationships, etc.).
2. Trade is an opportunity to propose a solution that companies want to achieve or to listen to the proposal of the opposite company. The idea is to find the suitable thing a company or a supplier has to exchange with one another (‘Win-Win Negotiation: Finding a Fair Compromise’, 2016). Trades deal with a comfortable exchange between companies. In our case, the project manager can ask to trade 25% of chips in order to avoid money problems or cancellation of the contract.
3. Alternative is a chance for the project manager to provide two or three possible solutions for the existing situation. Three possible alternatives should have been written in the contract in case of such kind of a situation. The first one is to set a short deadline for the complete exchange of damaged product. The second is to exchange the damaged product in the next delivery. The third is to provide money back for the damaged product without exchange.
4. Relationships between the companies is a cornerstone of the decision a project manager will make. If the relationships are good and productive, the company can compromise the incident and hold a negotiation in order to come to a suitable for both sides decision. On the contrary, if companies are in bad or neutral relationships the project manager can provide conditions suitable only for his company without future cooperation. In the current case, the relationships between companies are productive and this is the first time the company faced problems with it. That is why the project manager can set rational solution to the problem without any threats.
5. Expected outcome of every negotiation is set due to the situation. It is important to answer the question, what outcome is needed for a company? Also, in the given situation, it is important to compare it with previous expectations (‘Win-Win Negotiation: Finding a Fair Compromise’, 2016). In our scenario, the project manager expects to achieve an understanding of the supplier’s company and to meet the conditions of chosen solution, as well as, to save the ongoing relationships with the supplier’s company.
6. In our situation, consequences of losing the negotiation will cost a lot of money for the company. In addition, the project manager will propose to suspend cooperation with the supplier’s company. This decision will provide even more money lost because it will take the time to find a new responsible supplier. In the case of winning the argument, companies will get to the common suitable decision and will get along with minimum cost.
7. Power is the most controversial point here. It is hard to decide which company has more power the one, which pays money for the product or the one, which provides the product. In order to decide let us come back to our point of productive relationships. The company has to treat the supplier equally. It is mentioned earlier that a company should not forget to show in practice the common interests with a supplier. It also should take into account the interests of the supplier. Productive and strong professional relationships depend on the fair treatment. That is why the project manager should take into consideration abilities of the supplier to meet the deadline.
8. Possible solutions have to be well-considered decisions based on the careful considerations. In the current case, the project manager should provide all the possible compromises in order to save the existing relationships. Still, it is necessary to inform the supplier’s president with all the information about the decisions the company made in order to deal with the incident (payment, deadlines, shipping conditions, etc.).
Business Letter
Dear, (president’s name).
My name is (name) and I am a project manager of manufacturing company (name of the company).
As you know, our company uses your computer chips in our new technology. We cooperate with your company for a certain period and there were no problems until now.
I am writing to you about the incident that happened during your last shipment. Our company received 25% computer chips with the defect. It is the first time that we encounter such an unpleasant situation. In order to save the productive professional relationships, our company is ready to compromise. Our company would like your company to meet the following expectation:
Our company would like to receive trades for that 25 % of defective chips.
We do not want to receive any offset.
We are ready to pay shipment cost.
We would like to discuss the suitable for you deadline (no longer than one month).
If you will follow all the above-mentioned conditions, our company will maintain strong professional relationships.
In the case of non-compliance with the conditions set above, our company will ask for the offset as well as complete cash-back as it is mentioned in the contract.
We would like to give you a chance to set time frame. We understand that it is a long process; still, we would like to receive computer chips during the following month. We will wait for your answer with a set deadline.
If your company is not able to follow above-mentioned conditions, please provide us with reasons for your refusal or delay and we will consider alternative solutions stipulated in the contract.
We hope to hear from you soon in order to deal with the existing situation. Our company will be happy to continue our cooperation with you.
Sincerely,
Project manager.
References
Win-Win Negotiation: Finding a Fair Compromise. (2017). Mindtools.com. Retrieved 30 December 2016, from https://www.mindtools.com/CommSkll/NegotiationSkills.htm
Wysocki, R. (2011). The business analyst/project manager (1st ed.). Hoboken, N.J.: Wiley.
