With more than 2,000 suppliers across the AF supply base, AF Head of Procurement – Agricultural Services, Kristian Dunham, explains why effective supplier management is essential to ensuring Members get the right products, at the right price, and with the service they expect.
"The first step in our supplier management process is supplier onboarding. When a potential supplier expresses an interest in becoming an AF supplier, or if we proactively identify and approach a potential supplier, we ask them to complete a pre-qualification questionnaire.
"This helps us make sure they are aligned with AF in the areas that matter, from the discounts they can offer and their geographic coverage to the sectors they operate in. We confirm terms and conditions, and the potential supplier’s approach to ethical procurement and modern slavery.
"But approval isn't the end of the process. Once a supplier is approved and we start trading with them, they become part of our ongoing supplier management system, which is built around two key processes: segmentation and scorecards.
“Supplier segmentation is simply the process of grouping suppliers into different categories based on their importance, performance, and value to the business.
"Our segmentation is an annual process. At the end of each year, we review every supplier with whom we've traded more than £10,000 during that year.
"We look at factors including dissatisfaction cases, feedback on delivery times, and whether suppliers are sending electronic invoices, to name but a few. Suppliers are then placed into one of four categories: foundation, silver, gold or platinum.
"Being a foundation supplier doesn't mean they aren’t meeting our basic expectations.
"The other categories give us a framework for managing our relationships throughout the year. For example, our Procurement Managers to hold strategic meetings with our suppliers.
"The aim is simple: to make sure performance stays on track and our relationships continue to deliver better value and service for Members."
"Alongside segmentation, we use scorecards to track supplier performance on an ongoing basis. Supplier scorecards are simply a way of measuring and evaluating supplier performance against a set of agreed criteria.
"Our Procurement Managers score suppliers against criteria including pricing, quality, timeliness, invoicing, issue resolution, service responsiveness, and proactivity. By regularly scoring performance, we can identify trends and act before problems become bigger issues.
"It’s important because supplier management is about much more than price.
"There's little value in ordering something at the cheapest price if it doesn't arrive on farm in good condition, when it's needed, or isn't fit for purpose.
"By monitoring performance closely, we're often able to identify procedural issues or additional training needs before they have an impact on Members."
"With the number of suppliers we work with, it's important that standards don't slip.
"It’s good to be challenged when Members sometimes ask why their orders for certain products always seem to go to the same supplier, or why they no longer receive three quotes for every enquiry.
"The answer is that proactive supplier management means we often already have the information we need. For many products, we have price lists from multiple suppliers, while for construction materials we have tendered key products.
"That means we can place your order with the supplier offering the best overall value, based not just on price but also on their proven performance and ability to deliver what you need, when you need it."
"We're soon launching our AF Supplier Directory on myAF, which will show Members all AF suppliers and, importantly, which are platinum suppliers.
"These are the crème de la crème of our supplier base: strategic partners who consistently deliver a service that exceeds our expectations and those of our Members.
"We have the tools and information to explain our approach and give you confidence in why we work with the suppliers we do."
"Giving suppliers something to aspire to is a fundamental part of our approach.
"And the feedback we've received from suppliers has been extremely positive. We give suppliers a clear framework and expectations, so they can see how they're performing and understand what they need to do to progress.
"Several national suppliers have told us that our approach to supplier management is one of the reasons they value doing business with AF. One supplier has even adopted our approach for managing its own supplier base.
"For us, these are signs that the process is doing what it should.
"We've refined our supplier management approach over several years, and we believe it's one of the best tools we have to make sure that, however you order through AF, you receive a consistent level of service that meets your expectations. Which sets AF apart from others, highlighting our true procurement expertise.
"And by giving Members greater visibility of our suppliers and their performance, we're taking another step towards helping you make informed decisions - based not simply on who's cheapest, but on who is committed to doing more for your business."
