Successful relationships are key to effective supply chain management. All the cogs and wheels must work together to create one well-oiled machine. Perhaps most vital is the connection with suppliers. Higher integration of this facet of the supply chain can lead to better outcomes, including customer satisfaction, cost reduction and overall efficiency.
In fact, according to Entrepreneur, fostering that connection with suppliers can aid in timely deliveries, which keeps customers happy and gives insight for inventory management, allows for greater competitiveness and can even spark innovation in product development. Here are a few tips companies can utilize to get the most out of supplier relationships:
Ensure All Stakeholders are on the Same Page
Keeping all supply chain partners, including suppliers, up to speed on the most current happenings is vital to maintaining relationships and promoting success. Writing for Manufacturing Business Technology, a group vice president at Ford Motor Company, Hau Thai-Tang, explained why alignment is so valued at his company.
At first glance, it seems a simply enough concept: Ensuring everyone is up to date on current progress makes communication more effective and can make partners feel valued. However, the steps to achieving alignment are not always so easy. According to Thai-Tang, transparency must be integrated into everything from product development to purchasing.
One way to do this is to promote collaboration. Creating a culture where sharing ideas is encouraged and even failures are okay can go a long way in fostering teamwork. This stems from internal structure but then must translate to how employees interact with partners down the supply chain, including suppliers.
Another tactic for promoting transparency and alignment is the use of data collection. As the RFgen white paper, "8 Signs You Need an Automated Data Collection Solution," explained, integrating an automated data collection solution can improve accuracy. Ensuring all shared information is correct is a key component for transparency. Plus, automated data collection allows for collaboration even with remote locations. This can bridge the gap between partners in the supply chain who do not work in the same building.
Utilize Adequate Data Collection Solutions
Data collection and analysis do more than promote transparency and alignment. According to Supply Management, scrutinizing supplier data allows companies to make the most profitable moves. With adequate analysis, teams can spot areas for improvement or opportunities for gains on a global scale. In an effective partnership, this allows all stakeholders to succeed, demonstrating to suppliers the value of the business relationship.
Make it Internal Policy to Value Partnerships
It is not enough for decision-makers and those who interact with partners to understand the value of business relationships. Every member of a company's team must embrace the partnership, doing what they can to foster the connection and deliver on their end of the deal.
According to Thai-Tang, this concept is especially important among purchasing teams. This sector of the company must have individuals who work specifically to ensure the supplier has a positive experience and hears uniform messages. That is, suppliers should not have to decipher contradictions from different people in the same company. All stakeholders profit from this strategy.
Manage Conflicts Professionally
When something goes wrong, it is all too easy to point fingers and assign blame. While it is important to understand the cause of problems so companies can come up with preventative solutions, these types of incidents must be handled with care.
A separate Supply Management article stressed the importance of looking at the issue from different angles. This way, companies can identify fault in the process for all parties - not just suppliers. Not only does looking at things from an objective standpoint allow teams to get to the actual root of a problem, but it preserves the supplier relationship. It demonstrates that honesty, collaboration and respect are valued by all parties.
Mutual respect and trust are key to any business partnership. When companies apply these best practices to their relationships with suppliers, both parties are able to adapt for greater success. In turn, businesses avoid making the partnership one-sided. All stakeholders profit and want to help each other progress.