Delta COO Discusses What Delta Wants in a Supplier

This year’s ACPC keynote speaker was Stephen E. Gorman, the Executive Vice President and Chief Operating Officer of Delta Air Lines. Gorman explained that for Delta, the total cost of ownership (TCO) is based on cost quality and delivery. They expect their highly effective suppliers to provide this TCO. Gorman explained that a highly effective supplier needs to perform.

The Air Carrier Purchasing Conference (ACPC) hosted over 1700 guests in Atlanta this year – over 1400 of them were suppliers. Thus, Delta’s ideas about the supply chain were an important topic at the Conference.

Delta’s position is that the air carrier and its supply chain are linked together. Gorman explained that this relationship starts with delivery on a commitment.

Communication and transparency are important to a successful business relationship. As a tool to support communication and transparency, Gorman explained that Delta is committed to its Supplier Performance Management (SPM) system. The SPM lets suppliers know what is important to Delta. The SPM has clear metrics, and it provides regular feedback to Delta suppliers. The SPM lets the suppliers know on a regular basis whether they are meeting Delta’s expectations.

The SPM lets Delta give suppliers credit for good performance and it also reveals opportunities for improvement. Gorman explained that Delta is committed to working with its effective suppliers to have honest communication and to work through issues cooperatively.

Delta is also looking for suppliers that are flexible within their business models to permit the supplier to respond to Delta’s changing needs during both strong markets and weak markets.