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iew the engagement as a broad problem-solving endeavor versus a mere review and supplier evaluation. Successful sole sourcing is built upon trust and goodwill. While rank-and-file employees might carry the day-to-day activities between buyer and supplier, sole sourcing relies more extensively on trust at the highest levels of the organizations.
This is important for several reasons. Specific solutions often are highly tailored to the individual buyer's needs, including the actual services delivered and the commercial terms of the arrangement. As a result, these decisions require not only the authority and buy-in from the highest levels of both the supplier and buyer - but also meaningful engagement in the details of the agreement. The natural tendency of senior management to delegate the accountability for the process to lower levels within the organization often spells trouble.
Also, without senior management setting a strong course and accepting accountability for the decisions, lower-level managers tend to evolve sole sourcing processes into an unending benchmarking exercise "to see if we are getting a fair deal." This typically leads to murky conclusions that do not reflect the limits of benchmarking and a breakdown in the much-needed trust between the two organizations.
3. Involve the board. Different companies have different internal governance guidelines for reporting programs of particular sizes, scope, or impact. Depending on the size and i
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