Paul Strachan
Suppliers are no doubt crucial to your business. Have you considered how developing good supplier relationship
management could be key to achieving better prices and better performance down the supply chain? Here are a few ways in which it can benefit your business to show loyalty and remain in good terms with your supplier.  - Pricing
vs stability. Remaining with one supplier can mean that you accept a higher contract price but nurture a stable relationship. The other option is to seek out a lower price but risk of volatility by switching supplier. Consider however that a supplier with whom you have applied good supplier relationship management is likely to drop their prices to maintain the valuable relationship. Both parties stand to benefit from negotiations.
- Building efficiency. The better
a supplier gets to know your business, the better knowledge they will have of your methods and in theory, the more efficient the transactions going forward. This also works the other way round. When both buyer and supplier understand each other’s business models, there is opportunity for consolidation and the ability to develop a more efficient and streamlined chain which reduces costs through economies of scale.
- Ongoing improvement strategy. Once you have built a
relationship with your supplier, you can encourage them to continually improve their products and services. It is best to take an active approach to contractual performance in the form of KPIs, as the performance is then measurable and you can legitimately seek ongoing improvement. This is one of the significant ways in which supplier relationship management is very beneficial to the buyer.
Taking all this into consideration when choosing suppliers for your business may have you
taking more time to make the decision that’s right for your business long term. If you’re ready to take the next step in exploring the potential for your business? Then contact me and we can talk. Paul Strachan M. 07793 447961 T. 01307 460667 E.
In today’s world, the idea of a long-term vendor relationship may be one that seems intimidating. Due to options online and the opportunity for short-term discounts, the idea of switching vendors may appear fruitful. Often, the long-term costs of administrative inefficiencies and price escalations offset the initial benefit
produced by the short term discounts. While businesses may offer promotional deals, these often expire. Then customers are left with poor experiences, costing you headaches, time to work through issues and ultimately extra money. This is a common problem: eighty-two percent of customers have left a company due to poor customer service. This is why finding a trusted vendor and forming a
long-term relationship with this team is crucial. After working in this industry, here are some key takeaways I have found when looking for vendors. Good signs of a long-term vendor- Flexibility – You schedule changes from day to day, so being able to adjust is critical for your business. This is why having a flexible vendor partner to work with is important. If you have found a vendor who will adjust their schedules to help yours, you have found a great
partnership.
- Local Service – No matter how state-of-the art and user-friendly your equipment is, at some point you will need support if it breaks down, training on how to use your machine, etc. In these situations, wouldn’t you rather work with a business who provides support in your area instead of calling an 800 number? Quality service is so incredibly important to a customer relationship.
- Integration into the community – Working with people who care
about your community and are actively involved helps to foster long-term and quality relationships. Actually knowing the people you work with adds another level to their accountability and service.
- Financial Stability – Placing your trust in a financially strong company is key when looking for a long-term vendor. Financially unstable companies can end up dissolving, being purchased, or providing poor customer service.
Signs to watch out for with a vendor
relationship- Sporadic purchasing – One warning sign to watch out for is if a potential vendor is suggesting one-off purchases that are reactive to a situation. This often results in money being lost due to support on the older pieces of equipment in addition to paying for the installation of new models.
- Reactive planning – Beware! This is a vendor who plans to put out fires instead of being proactive. Time and time again, practicing this strategy
will leave you dealing with the chaotic aftermath instead of planning for the future.
- Unresponsive team – If you have issues getting into contact with the sales representative or have never met them before beginning business, the behavior is probably a foreshadowing of what is to come. If they are unresponsive when they don’t have your business, imagine what the response time will be like when they do!
- Little to no planning meetings – A sign of a great
vendor is one that plans and creates initiatives ready to help you in the future. If there is a lack of organization, carrying your businesses in the long term is most likely not on their top of mind.
Recommendations for getting the most out of a discussion with your vendorVendors have a lot to do with your overall relationship, but communication in your relationship is a two way street. By asking questions, you can do more to nurture your vendor relationships. Consider
these questions: - Do you have recommendations of services that could better help our businesses?
- Are there behaviors our business can adopt to improve functionality?
- What are some of your goals over the next year for our business?
- What would you recommend for risk aversion and maintaining our regulatory compliance?
Involvement is keyVendor relationships can be a complex world to navigate. If you remember to do your due diligence before
choosing a vendor and continue to be involved after, you will find a long term vendor that is a great fit for you.
What is a benefit of building long term beneficial relations with a vendor?
What is a benefit of building long-term relations with a vendor? Both retailers and vendors can develop mutually beneficial assets and programs that will give the retailer-vendor pair an advantage over competing pairs.
What are the advantages of having good relationships with suppliers?
Benefits of a Good Supplier Relationship. Cost reductions. ... . Increased efficiency. ... . Lower risk of price volatility. ... . Streamlining your purchasing process. ... . Opportunity to outsource tasks. ... . Product and process improvement.. Why is long term partnership important?
For almost every business, the need to establish strong, mutually beneficial relationships with strategically-chosen partners is essential. And the longer that relationship lasts, the better for all parties. The advantages include improved performance, greater cost efficiency and helping businesses to develop.
Why should businesses try to build long term relationships with suppliers?
The main benefit of having strong, reciprocal supplier relationships is getting more value for your company. The better you know your suppliers and they know you, the more likely you are to receive personalized service, discounted prices, and uniquely beneficial terms.
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