Businesses have long taken for granted supplier relationships, until the COVID pandemic forced all parties involved to immediately examine their relationships with suppliers. There are many reasons why it’s important to maintain a great supplier relationship, it not only makes daily operations more enjoyable, but it can also get you a better rebate deal, support greater collaboration and strengthen goodwill.
Strong supplier relationships are also key for businesses wanting to maintain growth and expand into new markets. A strong supplier relationship, is critical to the health of businesses, but how well do you really know your suppliers? Here are 10 ways you can improve your supplier relationships today.
1. Make sure you address any challenges and concerns with your suppliers
Working with an established supplier that has a solid reputation means that things should go smoothly most of the time. That being said, there will be times when issues come up and the supplier relationship can take a wrong turn. However, it’s important not to blow this out of proportion. If you have any concerns with your supplier, pick up the phone and talk to your supplier rather than communicating over email. Ensure you re-read your contractual agreement to understand what is expected of both parties which may not be being fulfilled. You can then use this as a springboard for honest and frank discussions to enhance your supplier relationship going forward.
2. Clear and consistent communication
Like any business relationship, keeping communication channels open with your suppliers and being transparent is a top priority, this will also hopefully prevent communication breakdowns in your supplier relationship. Regular communication will also help you understand how your supplier operates, as well as their internal language and business culture.
While it’s common to conduct most of your business from a distance especially with remote working now the norm, making a point to meet up with suppliers from time to time helps to build a stronger supplier relationship. If not possible consider utilizing video conferencing or scheduling virtual lunch meetings.
If managing rebates, you need to have the right collaboration tool in place that allows both internal and external teams to quickly communicate and share agreements – including any supplementary information. This will help facilitate a more transparent, even-sided conversation about your deals and a better supplier relationship.
3. Seek to provide and receive open, honest feedback
Performance can’t be the best all the time and there is always room for growth. When an open dialogue exists about where and how to improve, and you can mutually solve these problems together, trust forms in your supplier relationship. To nurture that trust and loyalty, make your suppliers feel like they are a part of your business rather than just a source of goods or services.
4. Never overpromise your suppliers
As partners look to secure opportunities and deals, we often find ourselves saying yes to everything. This is setting yourself up for guaranteed failure. If a supplier asks you if you have the capability of doing something that you truly know you cannot achieve, remember you can always say no and discuss other solutions to their problem. It all goes back to being honest in the supplier relationship and never overpromising your abilities.
5. Be fair with your suppliers
If the supplier feels that they are not being treated fairly they may be unhappy with the supplier relationship and not perform to the requirements of the agreement. If the buyer feels that they are being treated unfairly they may resent having the agreement with the supplier and look to source elsewhere. This is not to say that either party should roll over for every requirement of the other. Fair means being treated reasonably based on the requirements of the contract and the supplier relationship.
6. Identify and monitor any risks in your supplier relationship
Every business faces risks but it’s best to identify and monitor potential issues in the supply chain in advance so that you can mitigate threats to your business. Therefore, you should work collaboratively with your suppliers to identify possible risks in your working relationship and the best ways to manage them proactively. Failing to do this or being under-prepared could generate some unwelcome surprises which have the potential to fracture the supplier relationship.
7. Understand and honor contractual obligations
Your business needs to have confidence that the supplier is delivering what they are being paid for. In turn, the supplier needs confidence they will be paid fairly and in a timely fashion for the products or services they provide. In a positive supplier relationship, both sides understand and uphold their obligations, and the best way to ensure this is to utilize trading agreements that clearly state the terms of your deals. Regular interaction with mutual respect, openness and fairness will ensure effective communication which keeps the agreement on track and the supplier relationship thriving.
8. Become vested in each other’s success
Building an appreciation for the struggles, work and success of both parties also builds trust and is often where supplier relationships fall apart. Becoming vested in each other’s success means taking time to understand the goals of both trading partners and developing a plan to achieve those goals together. It might take uncomfortable change, willingness to give and take, and journeying into unknown territories together. However, when that happens, trust in each other grows rapidly.
9. Talk with your suppliers about other opportunities to work together
During your regular meetings with your suppliers, discuss opportunities to help one another. Perhaps you could trade referrals or introduce one another to key players in non-competing industries. Now more than ever is the time to get innovative with your suppliers.
10. Leverage rebate management software
You can also use software solutions to better manage your supplier relationships. For example, you may want to invest in cloud-based rebate management software that allows you and your suppliers to share deal information and collaborate. It’s an effective way to build transparency into your supplier relationships as well as creating an audit trail of activities to help pre-empt any misunderstandings. Using Enable will also significantly reduce your time and administrative costs, making it a much smoother process and more accurate.
Are you ready to enhance your supplier relationships?
Relationships grow and strengthen over time. A strong supplier relationship will help you to navigate disagreements and problems. It will also make it easier to negotiate and strike a stronger deal. However, be sure that your supplier relationships aren’t just transactional. Rather, see them as opportunities to grow credibility, help fellow businesses succeed, and expand your company’s reach.
By aiming for long-term supplier relationships, you’ll create more opportunities to improve communication and form greater trust. You’ll help foster a desire on both sides of the supplier relationship to continue doing business with each other. And best of all, long-term supplier relationships can encourage a willingness for compromise in many areas. When you can demonstrate your company’s loyalty over a significant length of time, you should expect to be rewarded in some kind.