Tips to ensure successful supplier relationships - Business Works
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Tips to ensure successful supplier relationships

Thomas Coles, Chief Executive, MSM Software The recession has underlined the significance of forming strong relationships with key vendors in order to sustain continuity of supply. Supplier Relationship Management (SRM) is important for the organisation and the supplier relationship, leading to improvements in efficiency and enhanced return on investment. However, this may not be the case if your supplier is letting you down by performing sub-optimally. To help you prevent this from happening, we are going to look at five ways to ensure your supplier relationship is a success:

1. Prioritise communication: Communication is essential in many avenues of business, particularly in the case of maintaining successful client and supplier relations. If a supplier is not integrated into an organisation and does not understand a company’s strategic objectives, this may lead to frustrations and poor results. By communicating your needs and maintaining a good level of communication, your organisation will benefit more so. It is also essential that you provide your supplier with honest projections of your needs, in order for their planning and production methods to be in accordance with your own. Putting all communications in writing is another important feature of a good supplier relationship and will help you to avoid any mis-communications or misunderstandings. Furthermore, personalising the relationship by visiting the suppliers’ office and including them in strategy meetings can ultimately pay off for you and them.

2. Systemise SRM: Doing so from the start will help to minimise risk and ensure an appropriate monitoring system is in place. From the beginning, you should consider which supplier warrants more of your SRMs time and how they will meet your needs to grow and improve. Make sure that governance functions do not only concentrate on handling underperformance, otherwise this will limit your growth and impede potential innovation in areas such as new product development.

3. Benchmark supplier performance: This goes beyond service level agreements (SLAs) and allows for your supplier’s performance to be quantified and evaluated. This should be used to distinguish a good supplier management team from one that is floundering, being based on factors such as quality and the timeliness of deliveries which will ultimately affect how clients view your reliability and trust in your company. Make sure you and the supplier agree upon the KPIs (Key Performance Indicators) and overall goals for your organisation.

4. Service reviews: SRM performance should continue to be reviewed and re-evaluated throughout the service agreement and it should be attended by people of appropriate seniority from the organisation and supplier. This will ensure KPIs are being met and that innovations continue to be implemented. Steps to be taken in order to correct any problems should also be agreed in advance, as this will work to ensure issues are resolved quickly and that there is clear insight into how projects are developing against expectations.

5. Refine operational processes: SRM should continue to be refined in terms of its delivery and performance. Making regular time available to review day-to-day operational performance and long-term goals will also pay off, as these may change over time with the development of your company. Doing so will ensure the efficient management of suppliers and work to support organisational operations. It will also help to bring through innovations that may have been impeded in previous systems.

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