How to Build a Strong Relationship With Suppliers
In this highly competitive business world, it is important to stay ahead of your competitors and make your business more accessible. If you have made your mind to grow your business, then you must look for dynamic ways to get the task completed. How to scale your business for growth is another challenging target that all business owners need to achieve.
Despite producing quality goods and services, if you are unable to deliver them to the new customers within the committed time, then you are wasting your time and effort. In case placed orders do not reach the customers in time, you have insufficient staff, or do not have enough delivery capacity; then you are going to have unsatisfied clients. All these kinds of situations can be stressful.
Making strategic decisions regarding warehousing and transportation do not cover the entirety of the logistics industry, there is a lot more to it. To ensure the optimum performance of your supply chain, you need to formulate an effective strategy for logistics. An effective logistics strategy consists of a set of policies, goals, and coordinated plans among multiple partners. This can assist you in enhancing the performance of your supply chain as well as developing an improvised supply chain management system.
A majority of the service-based and product-based companies rely heavily on the efficiency of their suppliers. Hence, organizations must incorporate suppliers into their strategic plans. However, some companies fail to see the issue and often misinterpret the situation. They might consider themselves to be in a dominant position, since they are financing a purchase order, and can freely exploit it with unreasonable demands.
Every organization needs reliable suppliers as their partners. And once you have found them, you need to treat them right. Similar to the hard work you put in to develop or build relationships with your customers; you need to work on building and developing strong relationships with your suppliers as well. Being loyal to your suppliers is important, as they are essential for the growth and maintaining good health of your business.
Ways in which suppliers affect an organization:
Finance
Suppliers assist your organization by providing the required items/ goods without needing to pay for inventory management, which reduces your overall cost.
If you have been a good customer, by paying your dues on time and being loyal, then you might be able to ask your suppliers to finance your business, once you are set on a fast track for growth. This financing may take the form of investment in your organization, a loan, or new purchases with extended terms.
Innovation
Your company’s vision for new product development may very well be assisted by the contributions from your suppliers. This is because suppliers are often innovating to be on the cutting edge for new products. Good and healthy supply partners will help you tweak your new products by understanding your company and your requirements. Good relationships with suppliers may also help you at times in negotiating terms with manufacturers.
Competitiveness
Suppliers can assist you in having a competitive advantage in your industry, by providing you with efficient inventory management, ease of financing a purchase order, better pricing, high quality, and reliability.
Timeliness
Customers view timely delivery as proof of your reliability. Minimizing inventory management becomes imperative for a quick turnaround, which also helps you to mitigate the risk of inventory obsolescence. Suppliers help you achieve timeliness and ensure quick turnaround by employing their reliable systems and negotiating terms with manufacturers.
Quality
The influence of suppliers can affect the quality of your product and the growth of your business. Good and reliable supply partner help you to ensure higher quality and achieve customer satisfaction. This at times reduces your returns but at the same time adds cash to your bottom line.
All the aforementioned factors enhance your cash position.
Be a valued customer
To build strong supplier relationships, you too have to do your part and be a good and valued customer. There are certain things you have to do, to be perceived as a valued customer by your suppliers.
Share information
You should keep your most reliable suppliers aware regarding the ongoing in your company. Inform them about changes in special promotions, new products, and key personnel among others. You’ll be amazed to see that, many times your suppliers might assist you in new customer acquisition.
Personalize your relationships
Plan regular visits to your suppliers’ offices. You can also consider involving them in your strategy meetings. Ask your suppliers for lunch/ dinner and invite them to your office outings or parties.
Inform ahead of time
Providing your suppliers with adequate lead time by acting on the information in hand, will help your business in the long-run. You must inform them regarding your needs and any major significant changes in the same. Knowing your suppliers’ production needs, methods, and inventory management, helps you to develop adequate lead times for them. Hence it is required that the information is free-flowing from both sides i.e., organization’s and supplier’s.
Pay on time
Being regular at paying on time to your suppliers, goes a long way in building long-lasting relationships. Make sure the terms of financing a purchase order are decided before you have placed an order. If in case you are not able to pay on time, call your suppliers and explain to them the situation briefly. You might be awestruck at the benefits and goodwill you will earn by following these basic rules.
Final thoughts
“A smart manager will establish a culture of gratitude. Expand the appreciative attitude to suppliers, vendors, delivery people, and of course, customers.” — Harvey Mackay
It is not overly complex to develop reliable relationships with your suppliers. Always pay on time, be loyal, treat them fairly, inform them of your standards and needs, and be communicative. It actually, is that simple!
