I have witnessed many business cases where suppliers are navigating in total darkness, trying to satisfy their customer’s demands and wishes without really knowing what they are expected to deliver. I have also seen many purchasers trying to get something out from their suppliers which they will actually never get, because the chosen supplier is not the right partner, the strategic fit is missing.
Supplier relationship management (SRM) is the systematic approach of assessing suppliers’ contributions and influence on success, determining tactics to maximize suppliers’ performance and developing the strategic approach for executing on these determinations.
Here are ways to secure sustainable business relations and a positive supplier development.
Treat your suppliers as partners
Suppliers are your partners and this partnership should be based not only on financial transactions, but also on mutual trust, loyalty and respect. I mean, without your suppliers you cannot do much sustainable business as a purchaser. Your company is dependent on suppliers, make them feel like they are a part of your business. Inform them about your challenges and processes, such as new customer requirements, new distribution setups, growth plans, releases of new products and promotions. Listen to their concerns too. Try to find ways of creating a win win for both organizations.
Invest in a dedicated SRM process
A dedicated SRM process is essential it will help to guide your team through the management and administration of suppliers. Business is managed by people and their soft skills are the core of SRM. SRM framework will create alignment, a common understanding and set the tone of how to handle supplier relations in your organization. It will also help your team in prioritizing time, resources and effort on the right suppliers and secure a professional business approach from an overall company level.
Get everybody on board
Having a Supplier Relationship Management process in place is important but getting everybody in your organization on board is critical. It is the difference between failure and success. And here the soft factors come into the picture, where guidance, coaching, leadership, employee trainings and managers acting like role models are essential for obtaining a successful result. This is not just procurement but all stakeholders in the organization.
Invest in efficient technology
Even if business is made by people, investing in efficient supplier management software is undoubtedly valuable for any company. SaaS solutions are widely like SRMhub will provide specific modules you need customized to your business with no CAPEX requirements.
Right software will help you keep track of information about your suppliers’ performance and development in one place and by that saving many working hours.
Constant dialogue with your business partners
Make sure to have regular communication with each of your key suppliers. And the communication should not only be about price, but keep them informed and up to date. Share your strategy and plans so that they know where they fit in and how they can help, plan for and benefit from those plans. Again, talk to them on a wider business perspective. If you appreciate their work, let them know. If something’s not working for you, tell it. And ask how you together can improve your businesses.