At this point, you examine each supplier, beginning with the most important to your business and working your way down to the least important. You devise a strategy for collaborating with each of them. Remember that all suppliers are partners. You need them as much as they need you, and your strategy should include mutually beneficial methods of keeping everyone happy. The best SRM strategies aim to foster collaborative supplier relationships.
Showcase Your Customer Service Skills
This includes demonstrating to your suppliers that you are a good customer by paying your bills on time, giving vendors as much lead time as possible, and keeping communication open and clear. If you are unable to pay your bills on time, communicating with the supplier about when they can expect payment is critical to maintaining a positive relationship. They are a business, just like you, and rely on timely payments from their customers to keep their operations running.
Create a Risk Management Strategy
Working with a vendor always involves some risk. You can reduce some of the risk during the supplier selection process by looking at references, examples of their previous work, financial stability, and their ability to handle your order capacity.
But business will always go wrong at some point. Having a plan in place for potential risks, such as having another vendor ready in case of an issue with the primary vendor, can help prevent an issue with one part of your supply chain from affecting the rest of it.
Create a Resolution Strategy
Things will happen in any relationship, no matter how hard everyone works to keep the relationship in good standing. When a problem arises, a clear plan for dealing with it and resolving it must be in place.
Questions may arise such as those mentioned below.
- Who should be contacted if the issue cannot be resolved at the most basic level?
- What other options for escalation exist?
- Who are the stakeholders at each company who will be involved?
- How will they be involved?
Outlining this plan ahead of time aims to provide a timely resolution with minimal disruption to the relationship or operations.
Points of Contact should be centralized.
Suppliers typically have multiple contacts in your organization. Procurement handles contracts and negotiations, while logistics and quality assurance handle shipping and quality issues, and other business units handle ordering and delivery as needed. Rather than interacting with suppliers through multiple silos throughout your organization, centralizing everything creates a more efficient (read: less expensive) system and builds trust and credibility with suppliers.
Suppliers are frequently frustrated by having to deal with multiple contacts because there is often a lack of coordination with all of the communication. This leads to unpredictable customer behavior, especially if policies or practices are inconsistent across the organization. This means more costs for them as they sort everything out, and those costs will almost always be passed on to you. EffiGO has a range of procurement services that may align with the higher purpose of the smooth operation of your organization, whether large or small.
