CPOs are noticing how important it is to improve the relationships their company has with suppliers. Poor supplier relationships can negatively impact your business in a number of ways. The main way is money, discounts will hardly be forthcoming if there’s no relationship between you. Secondly, if you have a poor relationship and you need something urgently, how do you think the supplier will react? Will you be pushed to the front of the queue? We doubt it.
Fully engaging your supplier base is vital to a procurement function. It can help deliver new products that help grab market share from competitors, improve your manufacturing processes or drive sustainable performance. Are you planning on building a better relationship with your suppliers? Here’s a few tips that we think may help.
A user-friendly website helps a company showcase its offerings to customers. It also helps highlight a company’s values and its history.
Creating a website or extranet (if you have the capability) that is dedicated to your suppliers allows you to set out the standards you wish suppliers to adhere to. You can also have information about how they can win contracts as well as your company’s goals and success stories.
Clear communication is the key to the success of any relationship and a website/extranet such as this that communicates this right at the start, sets a relationship off on the right foot. Updating it regularly with important information around risks and opportunities will also keep it strong for years to come.
Online platforms that allow you to source and evaluate new suppliers are starting to appear. These allow you to source, view, contact and build a portfolio of potential and existing suppliers all in one place.
Having the opportunity to chat online with these companies will also help engagement, you can send your documentation in-app to evaluate their capabilities and also view any materials that they are sharing without the hassle of opening many different search engine pages.
Supplier days are another popular way of increasing engagement with suppliers and developing relationships.
These can be held annually, or more regular depending on how many suppliers you have and their geographical areas of operations (e.g. you can have one in Europe and one in the U.S. if your suppliers are located there). These events see your strategic suppliers invited to an external event where discussions can centre around the search for new innovations as well as your aims and product plans. This face to face communication also helps make your relationships as open as possible, as there is ample opportunity for feedback from both sides.
You could survey your suppliers each year to answer such questions as, “What does the market think about us?” and “What do suppliers identify as key strengths and opportunities in working with us?”. If you’re not able to do that, use Sentiment Analyses to help you get a feeling of how the market is talking about you (and them).
Having a great relationship with a supplier helps you to manufacture better products, lower your costs and streamline your manufacturing processes. Your supplier will understand not only your company and your customers but also the broader industry, as it is unlikely that you will be their only customer. They will have a vision for advancements that can improve your business, along with theirs.
Having the right strategic suppliers is critical to helping your business grow and develop. It is important that you find new ways to engage with these suppliers. Be it events, websites, chat software or something different, the key point is to ensure that suppliers are being engaged.