The six million dollar vendor

14.07.2011

For Tame, the simplest solution has been to embed the vendor's own people into the Jetstar business. Though they are not on the airline's payroll, they are held directly responsible for failures, if any, and the daily tasks inherent in providing contracted services.

More importantly, each quarterly review and contract renegotiation is carried out with the aim of further integrating vendor staff and building accountability from the vendor itself; "it needs to be more engaged and more aligned than what we had previously".

Each step at Jetstar is, in effect, a redesign of the partnership aimed at achieving better outcomes rather than retaining the status quo.

"I don't think people have quite worked out what the sweet spot is in vendor management," Jew says. "But I think they're getting there."