Your relationship with your suppliers is as important as your relationship with your customers. In fact, if a relationship with a supplier suffers you could end up with a breakdown in communication and supplies that directly impacts upon your customers. In the worst case scenario this can mean a loss of customers, and money in the process. Supplier management is therefore a key component of any successful business plan and you must ensure that the supply chain is optimised and accountable, in order to provide you with a steady stream of supplies to keep your customers happy at all times.
The relationship between company and supplier is at the centre of every organisation. All activities and day-to-day processes rely on the productivity and the integrity of the supplier. With a seamless flow of products and goods, your company can run, as it should. Even with just a little blip, this can cause mayhem and serious damage to the bottom line and your reputation.
The importance of the supplier is underlined in the fact that for the majority of global business, more money is spent on purchasing goods and items from suppliers, than is actually spent on employing staff members, with an average of 69.9 per cent of revenues spent on suppliers between 2009 and 2011 (according to a Proxima study).
Managing suppliers is therefore crucial in order to minimise the risks to the reputation of the business, as well as the financial problems encountered with a supply problem that lasts even for a short period of time. It is a challenge to manage suppliers however, and takes a professional service and company in order to achieve the correct results.
Being able to audit the entire supply process is a great start to proceedings. It allows you to make all stages of the supply chain accountable and accounted for. Having all of this information in one place, and easy to reach, makes analysis and improvement of performance for both you and your supplier, much easier to achieve.
Tracking and measuring the performance of your suppliers provides you with the clear, honest facts and foundation to hold your suppliers accountable should things go wrong. Your suppliers should be able to meet minimum standards and requirements that are part of your agreement, but just as you want to exceed your customers’ expectations, you should expect that from your suppliers too.
Along with the raw data that can be collected and analysed regarding the performance of your suppliers, it is key that you manage the personal relationships with them too. A good working relationship with a supplier can make such a massive, and positive, difference in the long run. It helps to keep communication clear and honest at all times, and can even help in cases where you need to ask for a bit of leeway or to restructure payment terms at some point in the future (which can happen to any company).
Supplier management is a key aspect of running a successful business, and it can ensure that you in turn keep your customers happy.