Working With Suppliers

Working with suppliers can be daunting. In one project however, we applied agile principles and achieved very good results.

Initially we discussed a traditional contract but in the course of the talks it turned out that all participants wanted to have something more flexible. So we put only the basics into the contract, e.g. rates, time frame, responsibilities, etc. With regards to the scope we only roughly described the subject but left the rest open. Principally the contract was time and material based, so admittedly required some basic trust.

Architecturally we were in the fortunate position that what the supplier was to implement could be "isolated" in a separate module with a clearly defined interface. So, we created the interfaces definition which was ultimately a source file plus a set of automated tests against those interfaces. Then the supplier knew exactly what was needed. If all tests pass he would know that he was finished.

If we would find that something didn't work as expected we would then augment the test suite and send it back to the supplier. He would then come back with an estimate of the cost and we would then decide whether we wanted it for that price. In some cases we negotiated, e.g. by asking what it would take to reduce the price, e.g. by slightly modifying the requirements (automated tests and/or interfaces).

Collaboration was improved by sending one of our engineers to the supplier once in a while and viceaversa. This, too, improved trust and communication and working together was much smoother.

Overall, we worked with that supplier for more than 2 years and the results were excellent. Trust was substantially improved and a required ingredient for the success. So in this particular instance, working with a supplier was almost as working with a different department in the same company.