The Supply Channel is an organizations ‘life-blood’, and therefore the nature of Supplier Relationship is a huge determinant of the business’ chances to succeed. The output of the organization is, largely, dependent on the input, which is availed by the supplier. A business establishment ought to, therefore, put a great deal of effort in maintaining good relations with the supplier(1). One way to do this is ensuring optimal communication and working together in close contact. By doing this, the company can benefit from:
1. Cost Reductions
By consistently giving feedback and recommendations, the business and supplier both benefit from reducing wastages. The business gets to provide specifications on raw materials depending on variables in the production process to maximize the quality of produce. By following these instructions, the supplier, in turn, gets to maximize the business’ uptake of their supplies. By instituting proper communication channels, transactions are timely. Therefore, time wastages and unnecessary squabbles are eliminated. This ideal relationship leaves the two groups to concentrate on their business operations, leading to increased profits.
2. Faster Transactions
Considering contracts take time to agree upon and finalize, letting poor communication get in between can make consensus impossible. The paperwork involved can be daunting. Consequently, it is advisable to cultivate good relations to hasten the process. Doing this not only reduces wasted time but also saves money. As we know, time is money. The fast transactions between the business and supplier trickle on to the advantage of the end-consumer who receives the product or service in record time as well. The three parties get to enjoy the satisfaction that comes with keeping time.
3. Builds Respect
Respect is a virtue celebrated in all aspects of life. Good communication gives both the business and supplier a sense of being appreciated by the other. This warm association upholds a healthy business environment that builds to increased financial returns. Collaboration is a key factor in maintaining mentally healthy employees who focus on their responsibilities without the nervousness caused by the anticipation of friction with the external environment composed of suppliers. Respect and trust go hand in hand(2); with trust further enhancing desirable working conditions. All these virtues contribute to the job satisfaction of personnel in the business as well as the suppliers.
4. Building on each other’s strengths
Every business has its strengths and weaknesses, necessitating coming up with strategies to maximize the former and mitigate the latter. When companies work together efficiently, they get to mask each other’s shortfalls and build on each other’s successes. One of the parties can mitigate unforeseen market volatility affecting another, and the favor returned when the situation reverses. That is why it is advisable to stick with a business partner and work with them for as long as possible to build good business bonds. Such an association provides a conducive environment to engage each other in continuous self-improvement mechanisms that eventually cause improvement in product-quality improvement.
5. Flexibility
Long term collaborations help the involved parties learn about each other’s product, services, and even business models. This knowledge is vital to determine a point of convergence upon which ideas of possible new products and services can be conceived. This ability to morph and adapt together is useful in a business environment that is ever changing. It allows a business to survive in tough economic times and thrive by exploring new opportunities that may occur on short notice.
Building a strong Supply Channel and developing good relationships with suppliers is not a complicated process. Be communicative, treat them fairly, be demanding (coupled with loyalty) and pay them on time. It’s that easy.
Sources:
- https://www.entrepreneur.com/article/206530
- https://www.businesshorsepower.com/trust-and-respect-make-great-partners/
About ISS Group:
ISS Group® is a Business Process Improvement (BPI) Solutions Developer and Systems Integrator. Knowing the importance of the Supplier Channel and fostering good relationships between businesses and suppliers, we continuously refine our solutions to push towards this end.
We assist organizations to improve efficiency, accuracy and collaboration of their business processes in Finance, HR, Operations, IT, Sales & Marketing, Administration and Logistics. Our innovative BPI solutions help overcome process hiccups and obtain global visibility mostly through Data-Driven Approval Routing and Workflow Automation to achieve organizational compliance, operational goals and financial controls.
We would love to hear from organizations interested in improving efficiency using solutions designed just for them. Contact us and we will be able to help you with anything you may need.
