| Date |
|---|
| 27th October 2021 |
Our Approach to Managing Frameworks
Like you, our team has been receiving a larger number of price increase requests recently due to increases in fuel prices, shipping costs and labour costs.
Part of the benefit of SUPC membership is ongoing contract management – we don’t simply ‘let and forget’ our frameworks. SUPC Category Managers work closely with members and suppliers to address issues both proactively and reactively. We listen to what you tell us and regularly feedback to suppliers on performance so they can improve the service they deliver to you.
We review and analyse all requests for a price increase and do not accept increases lightly. Providing value to our members is of paramount importance, and price increases affect the value everyone gets from the relationship. Here’s how SUPC manages and minimises price increases through our frameworks:
Ensure In-depth Knowledge of the Market and Supply Chain
Category managers do undertake a full chain mapping exercise to understand which elements in the supply chain are likely to prompt price increases. However, you don’t need to undertake this full exercise to understand where the challenges lie; fuel prices and lorry driver shortages are likely to have an impact on any goods that arrive in or move about the UK, over any distance. Category managers keep up to date with national and industry press to gain further insight into market changes or supply chains issues such as labour rates, skills shortages, fuel prices, goods shortages and employment levels.
Engage with Suppliers
Keeping in regular contact with suppliers means we will often get early warnings or insights of issues affecting their business. Whether this is carbon dioxide shortages or bringing staff back from furlough, we understand what is happening in their businesses and what impact this might have on us. SUPC category managers meet with suppliers several times a year to proactively address performance and price. We also meet with suppliers on an ad hoc basis to address acute issues.
Listen to our Members
Members provide valuable insight into what is happening ‘on the ground’. Category managers can sometimes be a step or two away from the day-to-day operational issues that can affect institutions, so hearing from members can mean starting conversations we might not have done, or may have had later.
Communicate with Sector Partners (Communication is Key, as You Can See!)
Category managers are in regular contact with their consortia counterparts. This communication ensures the flow and exchange of information nationally at category level and commodity level.
Challenge Price Increases
The category managers will always challenge a price increase. That will typically start with asking for a full breakdown of the reasons for the price increase. Is it the price of materials or goods? Is it fuel related? Has there been an increase in the minimum wage? Are there new regulatory practices that mean additional administration and time that cannot be absorbed?
Require Suppliers to Justify their Requests
We challenge suppliers to show evidence of price increases in their supply chain, whether the price of raw materials or import duties, wage rates or rent increases.
Negotiate Reductions
Our approach is to ask questions and challenge in the right way. Does the price increase need to be across whole ranges, or can some products be excluded? Can an increase be applied temporarily and be reviewed monthly or quarterly as the market adjusts again? Does the increase need to be as high as it is across the entire product range? This can be successful when the supplier has been asked for evidence of the increase.
Benchmark Prices
Having an understanding of the commodity and category areas means that some price increases can be mitigated entirely or reduced if out of line with the rest of the supply market.
More detailed updates by category will be coming soon from our category management team. In the meantime, you can read more about ways to avoid price increases on our website or talk to a member of the team by emailing supc@reading.ac.uk.