by Vince Principato
MBA, CMRP, CPM, Senior Consultant, Advisory Solutions - Supply Chain Operations

Coming to the table to resolve conflict is never easy. After all, the word itself has a negative connotation that evokes images of friction and war. In the world of supply chains, conflict can easily emerge when you mix external partners together with your team of purchasing supervisors, operations leaders and contract managers. Each party comes with its own perspective on how goods and services should flow through the chain.

Here’s an instance when strife and misunderstanding are almost inevitable. In northwestern Massachusetts, a new hospital administrator is unhappy with the quality of snow removal services on her hilly campus. The new vendor typically arrives late, without having prepped the surface lots and sidewalks. Removal efforts nearly always take place well after patients and their families have struggled to get to the lobby. A few falls have occurred and concerns about risk and liability have been noted. A meeting is held with hospital administration and the snow removal vendor and his son. During the meeting, the facilities director and the owner’s son get into a loud and heated debate about what constitutes a “reasonable response time” — the specific language used in the contract to describe the vendors’ responsibility for treating surface lots prior to impending ice or snow events. The relatively brief meeting ends with each party promising to return with some suggestions within a week.

Without reaching a middle ground, nothing gets accomplished. So, what is one to do when negotiations fall apart? While there are many one-sided ways to resolve disputes without negotiation, many conflict resolution experts would argue that the best chance for long-lasting harmony rests in a negotiation process characterized by a win-win outcome. In other words, an outcome where you and your external partner — a supplier — benefit together instead of losing apart.

When negotiations have come to a halt, consider the following steps to a successful negotiation that move away from conflict and toward resolution. These are based on my experience and observations, so feel free to tailor them to what works for you and your specific situation.

  • Establish a positive environment for change: Each party should refrain from negative public comments, tweets and posturing that would create unnecessary and perceived distance between them and the other party. Vying for public support and positioning over the other may distort facts in a way that just creates further hostility.
  • Set an upbeat tone: To set the stage for stress-free talks, use positive statements that revolve around both parties coming to a mutual agreement that will yield rewards. For example, the common goal that you and your external partner seek is financial success. You, by mitigating your costs, and the vendor by insuring profitability. Lean on that understanding so that you and your partner can negotiate a contract where both parties are able to confidently achieve these goals for each of your respective organizations.
  • Seek to understand before being understood: Use empathy to show that you value the other person’s viewpoint and actively try to understand each other’s position. Developing an empathetic mindset supports a cognitive approach over an emotional one. This tried and true Stephen Covey habit works in every situation.
  • Clarify both parties’ objectives: After setting the tone for a productive and positive meeting, move toward stating the objectives that you both want to achieve during the negotiation process. Through a more interrogative process, each party should seek to better understand the primary and secondary stated interests of the other. 
  • Negotiate equally: Now that each parties’ positions are clearly defined, work to satisfy both of your objectives where you accomplish your external partner’s goals without compromising your own. In a win-win negotiation, both parties achieve their primary objectives — perhaps restated and clarified — at the expense of some lesser goals.

After following the steps outlined above, you and your external partner can proceed with drafting the contract you jointly negotiated.  

Resolving conflict goes beyond just defusing a tense situation. It calls for two parties to come together and create solutions that empower both groups. The collaborative negotiation process is an ideal tool for supply chain professionals when negotiating with existing vendors over service level expectations. Or when trying to engage and resolve any differences we encounter for that matter.

About the author. As senior consultant in supply chain operations for Vizient, Vince Principato uses his subject matter expertise to assist member organizations in transforming their supply chain operations to leading-practice performance levels. His more than 30 years of industry experience provides him with a keen understanding of numerous aspects of supply chain operations, including corporate value analysis, capital budget and project procurement, and inventory optimization.

Published: February 18, 2019