The value of effective communication with your suppliers cannot be reinforced enough. Just as strongly as poor communication techniques can harm your business, effective communication can give you a major advantage. Integrating effective communication techniques will help develop strong supplier relationships by promoting trust, improving risk management, and supporting long-term goals.
Trust is an essential building block of effective supplier relationships -one that’s difficult to gain and easy to lose. It’s often said that trust is a two-way street. By remaining transparent and communicating at every level, you are displaying your trust in them, and they, in turn, would be more likely to provide you with the same courtesy.
A study by the Canadian Center for Science and Education (CCSE) points to other studies that indicate that communication builds trust and ineffective communication demolishes it. Their own study reinforced the correlation between trust and communication when it found that communication has a strong and positive impact on trust within an organization. They conclude that effective communication, that embraces authenticity, is central to building a trusting relationship which ultimately leads to commitment.
An article from Forbes states that, at the center of failures in buyer-supplier relationships, is poor communication, and effective communication requires not only quarterly meetings with suppliers but frequent, informal contacts as well.
Improve Risk Management
Strong buyer-supplier relationships can help reduce risks and control disaster when it strikes. When buyers and suppliers communicate effectively and efficiently, they can improve prompt collaboration to work toward the resolution of unforeseen issues. Such disasters could be anything from natural disasters that physically damage the company to the unexpected closure of a key location.
More specifically, incorporating an effective communication plan and using all the resources at your disposal, such as technologies and platforms that enable you to share information and communicate instantaneously. In such a situation as when disaster strikes, you’ll want to utilize a platform that can fast-track the procurement process so you can get back on track as quickly as possible.
Support Long-Term Goals
Effective communication between buyers suppliers helps support long-term goals by building a strong and trusting relationship in which both parties are comfortable sharing information and working together to support these goals.
Consider a situation in which you have a major campaign coming up. During this two day flash-sale, the product you’re promoting, which normally sells for 80 dollars, is going on sale 45. You’re expecting sales to maximize significantly in a short amount of time. How early do you order your products? Do you communicate the plan with your suppliers as soon as you know it’s likely to happen, or do you wait until you know for sure or feel they’ll have a sufficient amount of time to prepare?
Effective communication and trusting relationships between buyers and suppliers mean that you’re ready to reveal the sale to your supplier as soon as it becomes a strong possibility. They, in turn, could provide valuable insight and will have a sufficient amount of time to prepare for the sale and to address any unforeseen issues they encounter along the way.
Planning for Effective Communication
Create a plan to communicate more effectively with your suppliers. Here are a couple of questions to consider when planning buyer-supplier communications:
- How often should you hold meetings with your suppliers?
- How soon should you involve them in your long and short-term plans?
- What channels of communication will you use? Which technologies or platforms?
Our procurement solutions and technologies can improve effective communications through an advanced process of sharing, approval, response, notifications, and integrations. Contact us today for more information on how we can help improve your supplier relationships and communications.