Healthy and dependable relationships with suppliers and service providers enable companies to minimize risks and ensure a supply of high-quality raw materials and other goods and services at competitive prices. However, such relationships don’t happen overnight, nor are they easy to come by. As a business owner, you must devise a clear supplier relationship strategy and pursue it with diligence.
You need to understand your suppliers and your supply chain model. You might have a supply model that stocks inventory based on predictive demand analytics. Or you might have an on-demand model where you initiate procurement only after receiving an order or signing a sales contract. You have to find and brief your suppliers accordingly. Otherwise, misunderstandings will crop up and can harm your business.
Suppliers are crucial for your business because there are complexities at every level in a globalized world, from sourcing to transportation and warehousing. Experienced suppliers can reduce many uncertainties in purchase or procurement. Goods suppliers also have established transportation arrangements and can minimize costs and ensure timely delivery. All these factors guarantee that your business operations keep running smoothly and that you can satisfy your customers.
The principal ways in which you can build a dependable pool of suppliers and service providers are to strengthen your relationships with them. But first, you must find the perfect suppliers who suit your needs. You can do this by directly verifying the quality, services, reputation, references, and reviews. You have to check the lead times and delivery statistics of the supplier.
Then you have to strengthen supplier relationships. First, you must create an unambiguous service level agreement and set clear goals and expectations. Then you need to monitor supplier performance by tracking delivery times, quality of products or services, responsiveness to customer inquiries/complaints, pricing, and customer feedback. Furthermore, you should conduct regular supplier reviews to ensure that potential issues are addressed quickly and efficiently.
You may have to use a combination of strategies to ensure that relationships remain strong. These will usually include developing a fair and consistent purchasing policy; setting clear expectations; understanding the needs of your suppliers; establishing trust and mutual respect; having open communication; utilizing technology to increase efficiency; providing feedback; offering incentives and rewards; remaining proactive in problem-solving and ensuring timely payments.
With these strategies, you can foster strong and long-term relationships with your suppliers, and they’ll become your true friends, meet your business needs, and surpass your overall expectations.
