How FedEx Ensures Its Vendors Provide Quality Service

FedEx Corp. is so big and does business with so many technology vendors (read: 1,000) that it has developed a systematic approach for managing its relationships and getting the most out of them. To get the best service across its operating companies, FedEx uses the following mechanisms.

1. Relationship stewards. FedEx Corp. appoints one person to look after each vendor relationship. IT executives supervise relationships with the strategic vendors; IT directors oversee relationships with second- and third-tier vendors. The relationship steward keeps everyone apprised of what’s going on with a particular vendor. The steward is the go-to person if an operating company has a question on the technology, the standards associated with it, training, the best way to deploy it or how to work with that vendor. Thus, the relationship stewards also promote best-practice sharing among the operating companies. They’re also the vendor’s single point of contact inside the company.

2. A purchasing and sourcing group. To ensure FedEx Corp. and its operating companies get the best deals from their vendors, the corporate IT department created a purchasing and sourcing group within its vendor management office. The group is responsible for staying on top of the company’s top 100 contracts and the competitive landscape associated with each of those vendors. It also provides the IT leaders of the operating companies with a dossier on their top vendors containing information they can use to negotiate the best deals.

3. Monthly meetings. IT leaders across FedEx meet each month to discuss their practices for working effectively with technology providers. They talk about the information they share with their vendors and the due diligence they perform when selecting potential technology providers. It’s another way of keeping everyone within the geographically dispersed company in lockstep and of ensuring that FedEx doesn’t become a "victim of vendor roadshow," says Kevin Humphries, FedEx Corp.’s senior vice president of IT.

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Copyright © 2006 IDG Communications, Inc.

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