28 SEPTEMBER 2017
MANAGING SUPPLIER RELATIONSHIPS
The initial response approach used primarily OSRO companies
that executed work overseen by the Unified Command. The
OSROs, much like a general contractor, secured goods and
services from their own resources or the marketplace. However,
when it became obvious that the scope of effort would extend
beyond a typical initial response, a change in contracting
strategy was needed. The result was a dramatic increase in
the number and location of suppliers — and the associated
Supply management practitioners would normally use a Kraljic
matrix or other method to understand the buyer’s influence
and devise strategies to best leverage the marketplace. We
quickly learned that the Deepwater Horizon response largely
lacked commercial leverage. Often, the supply base had to
change quickly, as response tactics changed to meet changing
conditions in the water or on the shore.
It quickly became clear that supplier relationship management
would be critical for success, as well as to mitigate challenges
like getting what you needed, when you needed it, from
some suppliers. In some cases, this was resolved simply by
meeting the supplier’s price. More often, it was resolved by
PSCM professionals establishing relationships, regardless of
how transitory, with suppliers and enlisting them to help in the
We hired people from the impacted regions into the PSCM
organization. Not only were these highly skilled workers
members of the same communities, they were often neighbors
of the suppliers we used. We found that the people who had
success in the response environment were those who had a
level of emotional investment that helped them connect with
suppliers and enlist them to be part of the solution.
Throughout the effort, many suppliers contributed selflessly,
above and beyond any expectation of future business. For
example, a senior manager who volunteered in the response
logistics section worked 12 hours per day, seven days a week.
She had no expectation of increased revenue and knew that
future business would be based on objective analysis. She still
showed up, effectively erasing the line between buyer and seller.
This was not uncommon, and it reinforced the value of healthy
supplier relationships, not just in emergencies, but also in the
normal course of business.
In today’s business world, functional excellence and sound
practices often need to be adjusted for the situation without
compromising the professionalism or value delivered. We evolve
and adjust, every day, to changes in the business. During the
Deepwater Horizon response, change was frequent, and the
PSCM organization adjusted, while controlling how risk was
managed, focusing on value and working toward efficiency and
Finally — and most important — our supply management
successes do not diminish that people were killed and injured
during the Deepwater Horizon incident, the Gulf of Mexico
ecosystem was severely damaged, and people in the region had
their lives disrupted to varying degrees. I personally felt the weight
of those realities, as did everyone I know who worked on the
response and restoration.
That weight was the primary reason we worked hard to do the
best we could. ISM
Bob Talbott, CPSM, C.P.M., has more than 30 years as a supply management
professional in the oil and gas, financial services, and consulting industries. He
is an independent consultant in the San Francisco Bay Area.
After manual cleanup, plastic pom-poms, which attract and hold oil,
were set on Fourchon Beach in Louisiana.
Gulf Islands National Seashore in Florida, shown in a photo
from earlier this year, had been one of the areas affected by the
Deepwater Horizon oil spill.