Published Thursday 19th May 2022
Unprecedented disruptions have shown just how important strong supplier relationships are. Suppliers, manufacturers and distributors are a vital part of the success of a business; without high-quality, reliable suppliers, companies simply would not be able to provide clients and customers with what they need.
Ensuring your organisation builds robust relationships with vendors and is always seeking to establish more effective supplier management strategies can be instrumental in contributing to growth and minimising organisational weaknesses.
So, what are the best ways to prioritise and execute strategic supply chain management methods that’ll better protect your business from future disruptions and make operations more efficient for everyone?
1. Consult with Your Suppliers & See Them as Partners
On a fundamental level, your suppliers are business partners – they may not be making organisational decisions with you, but they should be kept in the loop and updated with any vital changes.
Getting input and seeking constructive feedback is a great way to build a true partnership rather than a relationship purely built on an economic transaction.
When you ask your suppliers for their input and work on solutions together, you’ll likely find new cost management strategies and ways to boost efficiency that you wouldn’t necessarily have come to without their involvement.
2. Cultivate Long Term Partnerships
Seeing your suppliers as trusted partners can lead to long term agreements – something that’s beneficial to both parties.
Long term partnerships allow you to create a more trusting relationship that prompts ensured supply even when faced with disruption. Building a rapport with your suppliers opens the door to more opportunities by encouraging chain-wide innovation and, therefore, strategic growth.
3. Review Supplier Performance
If you’re thinking of your suppliers as partners and members of the team, you must hold them to the same high standards.
Be upfront about your expectations (in terms of product quality, schedule requirements and anything else) from the start. Once expectations are set, regularly track and review your supplier’s performance to see if all your targets are being hit.
Regular performance reviews will also ensure you can communicate any problems as soon as they arise.
4. Plan for Supply Chain Disruptions
In a perfect world, your suppliers would deliver what you need when you need it, but with unpredictable outside disruptions, this is not always possible. Understanding that your suppliers won’t always be able to achieve the impossible, and thus planning for inevitable risk, is essential.
Those who aren’t interested in building good relationships with suppliers might not be forewarned when problems are on the horizon. However, those who have a collaborative relationship can coordinate solutions and plans together.
In the face of disruptions, you may also think about how to achieve supply chain diversification.
5. Think About Contract Clauses
One way to protect yourself from risk and disruption is with carefully constructed contracts and clauses that keep you safe.
Priority supply clauses can be especially useful if risk is high. Clauses like this protect you by ensuring you are a top priority customer if there is ever a situation where suppliers need to prioritise. This means disruptions are less likely to affect you as you’ll have ensured continuity.
The inclusion of clauses involving performance expectations and other elements you want to protect are also useful as they ensure suppliers are as diligent as possible in providing what you need while also providing an official framework they can refer back to.
6. Make the Most of Technology
These days, utilising technology to increase functional and strategic operations should be a given. Managing good supplier relationships can be made far easier with the use of tracking and procurement software.
Specialist software ensures you can centralise information, track orders made with your suppliers and view all of their essential information in one place.
7. Be Prompt About Payments
Just as you expect certain things of your suppliers, they expect certain things of you – namely, making payments on time.
Cultivating mutual respect and a meaningful partnership means proving you are trustworthy and can remain a steady business partner that good suppliers will want to work with again. Losing suppliers can cost you time and money, so it’s in your best interests to keep them on-side.
Having a good understanding of what you want from a supplier relationship and putting the right processes in place can be invaluable when it comes to minimising supply chain disruption and putting your operations at risk.
In the last few years especially, we’ve learned a lot about tackling supply chain issues and inefficiencies and have supported countless organisations to get back on track. To find out how Expense Reduction Analysts could help your business reduce costs, optimise processes, cultivate sustainable growth and more, please get in touch with our expert team.