Humans are a social species, but that doesn’t mean that every business leader finds relationship management effortlessly easy. Even some of the most important professional relationships — those between an organization and the members of its supply chain — can be difficult for a busy executive to invest in appropriately to maximize business benefit.
There are noteworthy advantages to building better relationships with business suppliers. Suppliers often extend lucrative deals and discounts to business partners with whom they have good rapport, and that cost savings can radically improve an organization’s competitive advantage in its marketplace. What’s more, members of the supply chain usually have valuable insights into processes and procedures that can reduce inefficiencies and improve quality, and these insights are only available to those business leaders who take the time to talk to their supplier partners.
Fortunately, any executive can work to improve their supplier relationships. Here are a few tips to achieving more beneficial relationships within the supply chain today for various advantages tomorrow.
Risk Evaluation
Because relationships take energy and resources to cultivate, business leaders need to be certain that suppliers are worthy of the expenditure. Leaders should evaluate the risks of their suppliers, such as a lack of expertise or poor crisis management mechanisms. The presence of some risk is to be expected in any business partnership, but if risks seem to outweigh benefits, business leaders might source other options that will provide greater benefit with relationship investment.
Partnership Attitude
Many business leaders treat the vendors in their supply chain as subordinates or servants, making strict demands and expecting prompt service. However, in truth, members of a supply chain are all businesses with equal interest in meeting customer needs and achieving success. In truth, a number of suppliers have much more experience in their industry than the businesses they serve, and business leaders would do well to remember and respect that expertise. Treating members of the supply chain as business partners with valuable insights is an ideal foundation for an effective relationship going forward.
Consistent Communication
Vendors cannot read minds. Members of the supply chain have no means of understanding what a business wants or needs beyond what business leaders can communicate to them. Thus, businesses need to make communication with suppliers, manufacturers and other supply chain members a top priority. It might be useful to use supplier management tools to document the communication that has taken place between supply chain members to ensure that everyone is up-to-date with the latest information and orders.
Prompt Payment
No business should count money tied up in invoices as money available to use, so most businesses eagerly await payment of their accounts to improve their cash flow and reinvest in growth areas. Thus, when a supply chain partner is slow to pay, either waiting until the end of their payment period or asking for extensions past their payment deadlines, frustrations will mount. To prevent bad feelings between a company and its suppliers, company leaders need to ensure that members of its supply chain are paid on time and in full.
Cultural Sensitivity
Most organizations build a global supply chain, meaning that their supply chain partners are likely to be located in different regions and maintain different cultural practices and behaviors. It is imperative that business leaders be mindful of any cultural differences and avoid causing offense with language or actions. For example, it might be worthwhile to investigate cultural holidays and assume that suppliers will not be available during those periods. It should go without saying that business leaders should avoid making assumptions based on cultural stereotypes and that cultural jokes are always inappropriate.
Tech Investment
Supply chain technology is consistently improving, and business leaders should leverage available technology to improve their relationships with their suppliers. Technology can ease communication, not just between one company and one supply chain partner but amongst the entire chain of businesses that are essential for bringing products to market. Technology can also help track shipments, inventory, sales and more, making ordering smoother and stabler for everyone involved. Business leaders might consider the variety of supply chain tech available to them and build a system that adequately suits their needs.
Building relationships with supply chain partners is a good business strategy. By using the above tips, business leaders can cultivate relationships that provide outstanding business benefit into the future.
Interesting Related Article: “5 Ways to Streamline Your Supply Chain“
