How to foster mutually beneficial business relationships with suppliers
In a rapidly changing supply chain where businesses have been faced with significant challenges, it is vital for companies to nurture authentic and mutually beneficial relationships with their trading partners. The term “mutually beneficial” is core to a successful partnership and helps to ensure that both parties are committed to the arrangement. The essence of anything “mutually beneficial” is that both sides are getting something from it.
Although the creation of mutually beneficial partnerships is not easy, modern technology provides an opportunity for the relationship to evolve from fundamentally competitive to symbiotic relations. When both parties know what to expect from one another, they can identify opportunities to activate mutually beneficial deals leading to better margins, better supplier relationships and profitable growth.
Sharable and auditable data
Having access to trustworthy data will improve supplier interactions and give you the ability to monitor performance instantly. It cuts down the need for separate emails and other documentation. If a supplier requests information from you, you are in a more capable position to provide a quicker response.
Helping suppliers get access to data that communicates real-time performance also helps suppliers be proactive in addressing sources of pain in your organization for supplied products, services, and information that is critical to delivering mutual benefits.
Make payments on time
When a business pays on time, the people involved build mutually beneficial relationships. The supplier is more willing to go the extra mile to deliver better service. There’s also the relationship internally between finance and the rest of the business. When invoices are paid on time, you have a much better working relationship with team members in your organization.
Seek opportunities together
Many times, the non-transparency of your suppliers' tools and processes can create gaps in the relationship. Technology can play a crucial role in filling this gap. By using one system for managing and tracking rebate programs, suppliers can see where there are opportunities for mutual benefits and growth.
Joint innovation and collaboration
As the relationship with an organization develops, the communication improves, and they can begin to develop unique insights into each other’s businesses. When provided with this opportunity, partners can act as valuable resources for one another, sharing ideas that sparks innovation and new products, as well as better processes and strategies. Doing so requires a shift in thinking to view the other as a strategic partner. By building connection in this way, both parties can truly deliver mutual benefits for each other.
Review contractual terms regularly
A relationship with a supplier is monitored on the basis of a contract which states the terms each party has agreed to. Particularly, the contract states how the deal will operate, and the supplier’s performance is evaluated based on it. A strong relationship keeps the contract on track by holding regular discussions to check that both parties are satisfied and that everything is working as it should be - this can also avoid any disputes.
A future of mutual beneficial relationships
The next time you think you should distance yourself from suppliers, really stop and think how they could be mutually beneficial and whether there is a better approach than how you currently operate. Can you collaborate to develop and implement better processes, tools, and training to help your organization and your suppliers achieve high levels of performance, so everyone wins?
For example, by implementing rebate management technology, you can increase financial transparency, eliminate time-consuming manual processes, drive operational efficiencies, and mitigate business risks. This software not only promises to deliver all of these business outcomes but also to foster long-term and more meaningful relationships for the purpose of mutual growth.
Find out how leading organizations have gained from mutually beneficial relationships in the Harvard Business Review Analytic Services paper: The Evolution of Rebate Management.