If no man is an island, then certainly no business is an island either. For the health and growth of your business, you will likely engage in outsourcing some of your products and services through supply chain management. Just as you educate yourself and exercise your skills in managing your staff and your relationships with customers and vendors alike, much of your success will be determined by your ability to collaborate and communicate with your suppliers for maximum benefit to both parties. In some cases in some organizations, the percentage of products outsourced to 3rd party companies exceeds 40%, so your organization’s relationships with its suppliers can weigh heavily on your profitability scales.
Setting goals for how to approach your relationships with your supplies is the key to valuing them properly. When you find good, reliable suppliers, treat them like gold. Work hard on your business relationships by getting to know your suppliers. The better you know your suppliers, and the better they know you, the more likely you are to benefit from dedicated service, preferential pricing, and special terms. Through this process, your supply chain becomes more efficient, cost-effective, and ultimately, more productive.
Set Clear Expectations With Consistent Communication
Establish a clear plan for how to communicate with suppliers at the beginning of each and every relationship. This ensures efficient and beneficial relationships will follow. Set expectations for orders so that you experience fewer shortages, more on-time deliveries, fewer emergencies, and fewer hassles. Make sure to share data, update status information, and communicate back and forth efficiently.
Effective, open, two-way communication is at the heart of any strong business relationship. When you engage heavily with your suppliers, you can learn about them so you can build mutually beneficial connections. Work as hard on building good supplier relationships as you do building good relationships with your customers. They are essential to your business’s good health and prosperity. It all starts with setting clear expectations through consistent communication.
In addition to setting expectations, it is helpful to set standards for how you measure data. Evaluate your individual suppliers using tracking methods that measure performance. Keep track of things such as reliability of on-time deliveries, inventory performance, quality, and costs. Think of the process as not simply a measurement of metrics but an exercise in continual improvement.
By clearly outlining supplier expectations, and sharing the results with them, you provide your vendors with regular feedback they can use to exceed expectations and deliver additional value. Looking for quality and reliability, value for money, and most importantly strong service and clear communication from the start is critical for getting the most out of your supplier relationships.
When you contact your supplier, make sure that you know what you need, how many parts, the SKU #, and the questions you have about them. Keeping your communication clear, concise, and educated can help to make your supplier confident and relaxed when they work with you. It will eliminate confusion to ensure that everyone is on the same page when discussing things regarding your order.
Aim to form longer, stronger bonds with a smaller number of suppliers. This offers better value than the regular turnover in contracts. By knowing what you need, when you need it, you can set your expectations and allow your suppliers to also be prepared to fulfill them. When you are prepared, you show respect to your suppliers and their time and energy.
In all business relationships, there should be present a mutual understanding and willingness to consider the opinions, needs, and ideas of the other party in order to maximize the interests of both. From being respectful of your supplier’s time to being respectful in how you communicate with them will instill trust and move mountains in how you are treated by them in return. Your suppliers will attend to you with more ease and joy when they know you are going to be prepared, on-time with requests, and respectful in your approach to communicating.
Just remember that your suppliers have to work with all kinds of people from all walks of life. Most of the time a little sugar goes further than vinegar to make the medicine go down. Always be kind, professional, and understanding even when mistakes, mishaps, and emergencies cause strain in a supplier relationship. If your supplier is constantly late, letting you down on price and timelines, you may need to look for another supplier. That can happen at any time in every relationship.
Be Open and Fair
To build effective, long-term relationships, buyers must communicate with the suppliers on the basis of an equal partnership. For example, aggressive negotiation tactics will likely undermine trust and turn the relationship from collaborative to combative in no time. It’s helpful to consider the supplier as an extension of the internal organization and entitled to the professional respect afforded to co-workers, staff, and customers alike.
When it comes to dealing with your suppliers, be open, honest, and fair in every interaction. You can be a demanding customer when you need to be, just be fair in the process. State your quality and time needs clearly and hold your suppliers to their agreements. It goes without saying that you should always likewise hold to your agreements. Make sure your suppliers stay competitive by requesting what you need from them and getting them to work for you through kindness, not coercion.
To make any relationship a success, you will need to be prepared to change the ways you work to accommodate the other party. Very rarely will two organizations hit perfect stride from the get-go. Strong business relationships take time to build along with a willingness on the part of both parties to listen, to adapt, and to embrace innovation as a means of improving the relationship.
From negotiating payment terms to setting deadlines, it is important to be prepared to work with your suppliers fairly and honestly. Flexibility does not mean that you do not stick to agreements or deadlines. It means that you work honestly to accommodate as needed as things change.
Honor Contractual Obligations
In the best business relationships, verbal and written contracts ensure that each party upholds their obligations to the relationship. Each party needs to have confidence that the other party is going to fulfill its required and agreed-upon obligations. Through adhering to those contracts, trust is built and a more relaxed, easy-going relationship can develop.
Setting the tone, the standard for that to build is of paramount importance, so it is a priority to always honor contractual obligations in any business relationship. That includes contracts, finances, and handshake deals. Follow through with what you say you are going to do every time and you will become a business that others want to work alongside.
Be The Business With Which Others Want To Work
Your success depends upon you becoming a business with which your suppliers want to work. Studies show that a business that encourages the most advanced collaboration with its suppliers doubles growth metrics as compared to peers. Go the extra mile to discuss openly with your suppliers all available options, set reasonable goals, and constantly review and discuss successes and failures.
Strive to be a business that operates responsibly, communicates transparently, fulfills contracts, and encourages and keeps trust. Keep an eye on your integrity, follow through with your word, protect your relationships, and honor other’s contributions to your success. These are just a few ways that you can build stronger supplier relationships over time.
Encourage and Keep Trust
All of these tools build trust. Trust is the glue that binds your business relationships together. It leads to confidence in being able to build a collaborative and innovative relationship. It lends itself to problem-solving and strengthening relationships through that trust.
Once you find the most trusted supplier for any service or product, learn to value it, rely on it, and consider it as part of the fabric of your organization. Through clear communication, setting goals and metrics, connecting respectfully, openly, fairly, and by maintaining the highest standards of integrity throughout the course of any business relationships, you can each reap the benefits.
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