The title of this blog sets forward a question that many business leaders and managers often ponder. But before we address the how or the what, it’s important to consider the why.
Why would we care about improving our supplier relationships?
Suppliers — you may refer to them as vendors or contractors — are the lifeblood of any organisation. Just as the lion can not exist without the gazelle, the corporate giants cannot exist without those that support them. Unhealthy relationships make for unhealthy life cycles. When predators get greedy and overeat, they run out of food. When businesses consider only their own interests and fail to take care of their suppliers, they run out of options.
The reality of your situation may not be as dramatic as that, but the point is that it benefits those at the top of the food/supply chain to nurture the relationships of those they rely on.
Creating strong relationships with suppliers can ensure your business has access to the very best opportunities, those that launch it forward into new and greener pastures. Those businesses that treat their suppliers purely as an expendable commodity, to be used and leveraged as required without any consideration for those people offering said commodity, will find they harbour greater levels of risk within their supply chain.
Without strong and dependable supply chain relationships, you’re vulnerable to risks such as working with vendors that fail to deliver on contracts. They may also put in additional charges, deliver low-quality goods, fail to comply with essential governance that you need to protect your supply chain, attempt to leave contracts early for better opportunities or fail to offer renewal of service at the end of your agreement amongst an almost infinite number of potential challenges.
The impact of such weak links results in a supply chain that is near-impossible to sustain long term. Worse still, slowdowns, quality problems, incomplete supply processes and a constant need to replace vendors are all going to compound upon each other to dramatically increase the cost of your product or service delivery.
What is much more desirable is a healthy supply chain that runs without risk and promises long-term continuation. Good relationships with suppliers can be the key to such success, and the costs of maintaining such relationships cannot compare to the costs of consistently having to perform damage control operations to restore your supply chain.
Now we’ve looked at why we’d want to provide our suppliers with good relationships, we can move forward: What exactly are they looking for?
There is very little that matters more in any relationship than communication. Communication in supply chains allows for the flow of information. It keeps everyone on the same page, avoids delays, makes businesses comfortable in their position and allows them to develop their strategies. A lack of communication is the enemy of any successful supply chain, whether you’re a vendor or procurer. Your suppliers are always looking for simple dialogues and easy access to contacts.
Excellent access to information is of no use without clarity. The best communication structure in the world means nothing when the information being conveyed is total gibberish. Clear, accurate and concise information that ensures suppliers can identify their role and expected activity is key to forming strong and close relationships.
Suppliers need you to be transparent. If you hide problems, or fail to set your expectations properly, then you can face confrontations. If you’re experiencing a problem that impacts a contract, be transparent about it. If you’re expecting certain results from the supplier, set those openly and honestly. Transparency builds trust, understanding and respect; a vital aspect of developing long-lasting and healthy business relationships.
In most cases, you are probably not the only business your supplier is working with. They’re likely managing a range of projects, carrying out bids on tenders and always evolving their partnerships. With so many plates to spin, your suppliers want effortless interactivity when it comes to the onboarding process and contract management. They don’t have the time or resources to invest in complicated procedures. By making their lives easier, you’re helping to build a relationship they want to be a part of.
It’s easier than you might think to provide your supplier with everything they need to enjoy strong and healthy relationships with your business. The reality is that it’s all about managing processes and making life easy for vendors. In our digital age, technology has risen to this challenge, with software designers leveraging the latest cloud service options to create a solution that addresses all the major pain points a supplier could experience.
Dedicated supplier relationship management platforms (SRMs) exist to bridge the gap between vendor and buyer.
It starts with the onboarding process, which can be integrated with tailor-made onboarding software to streamline supplier procurement and provide that effortless experience your vendors are looking to achieve.
Once connected with your business, the SRM tool establishes unique profiles for your suppliers within a centralised database, automatically pulling information from the onboarding procedure so your supplier doesn’t have to suffer through elongated setups or repetition of data sharing. With profiles connected to their supplier accounts, all their interactions with your business are logged and recorded. From emails and other communications to activity updates, all interactions between business and supplier can all be found within the SRM tool.
By utilising SRM features, your procurement and supplier management team has everything they need to build strong relationships. All this data is remotely accessible and instantly available to anyone on the supplier account that needs to see it. Not only can they quickly gather information and reference records but also generate accurate and transparent information on account status, deliverables and deadlines.
There is no confusion, no cause for delay and no risk of misinformation. You can communicate openly, set clear and accurate objectives, offer complete transparency and make it easy for vendors to work with you.
Supplier relationship management software is all you need to start developing and nurturing those crucial supplier relationships.
Taking steps to improve supplier relationships is only going to lead to a better working and procurement environment. But besides updating to technological solutions, is there anything else you can be doing to empower your supplier relationships?
When entering the procurement process, be it for the renewal of contracts or sourcing for a new project, it’s easy to set your criteria for bidder preference around clear cut statistics and figures. You’ll likely consider:
But great supplier relationships are built on more than just data. They’re built on alignments of vision and culture. The suppliers with whom you share the most powerful connection may not necessarily be those offering you the cheapest solution, but those who embody the same brand values and ideals of your company.
When sourcing your next suppliers, consider looking past facts and figures to what makes the supplier tick. Explore how their values sync with your own. By moving away from purely transactional relationships and shifting towards connections that offer more meaningful opportunities to network, grow and achieve together, you’ll naturally develop stronger, more robust and more satisfying supplier relationships; relationships that work for both your business and your vendors.
Market Dojo eSourcing tools promise next-level pre-qualification questionnaires, including requests for information and requests for proposals. These data-gathering goldmines can go beyond the financials of a tender process to help you find suppliers aligned not only with your budgets and deadlines, but also your business objectives.
Every business is different, which means every business has unique challenges to overcome. Sometimes addressing the core principles we’ve discussed already — transparency, open dialogues, easy onboarding, etc — won’t cover every element of building great supplier relationships.
Awareness of your specific weaknesses should never be underestimated as a tool for growth. It’s important to be proud of your business strengths, and also play to them, but maintaining a keen understanding of potential shortcomings can have profound benefits.
So how does this relate to improving supplier relationships?
Knowledge of where your relationships are struggling enables you to assess, adapt and improve. For example, if you can understand that your business is not easy to communicate with from the perspective of a supplier, you can take the appropriate actions to mitigate problems and harmonise your supply chain.
Discovering these kinds of unique challenges is an investigatory process. It requires both internal audits and external feedback loops.
First, look at your own process in detail to see where you could make things better.
Some organisations struggle to keep track of supplier information, which can lead to difficulties in conveying instructions, repetition of information and unnecessary slowdowns. This can be frustrating for your suppliers. Understanding that this challenge exists is no bad thing. It means you can take steps to eliminate the problem. In this particular scenario, introducing a tool like SRM Dojo, with smart dashboards that collect all supplier information, activity and communication logs, protects your relationships by ensuring you always have the information you need to help suppliers progress their tender projects.
Not all businesses will have such a problem, but if yours is one that does, solving this specific issue can have a dramatic impact on your supplier relationships.
As touched upon already, you can also ask your suppliers how they perceive the working process you share. Open and honest feedback helps you identify your unique challenges directly from your vendors and can help you implement changes that ultimately benefit your supplier relationships.
Building the ideal supplier process and improving supplier relationships is always a one-size-fits-all process, and it can help you to see your business for what it really is:
A unique entity with unique challenges that require tailored solutions.
Market Dojo offers a feature-rich suite of tools and software that empower your business, helping you to build strong and rewarding supplier relationships. Get in touch with our specialist team today to talk about your unique challenges, your suppliers and how we can work together to secure a brighter future for your procurement process and ongoing supplier relationships.