One of our many goals here at Movers Development is to nurture company growth and business expansion. Hence, we explore different ways to accomplish this goal, one of which is through spreading knowledge. Today, we are discussing the importance of how to build good partnerships with suppliers. Although there are moving companies that have no need for suppliers, you never really know when that might change. And once it does, it’s better to get a head start and know the right steps towards success.
Supplier Relationship Management and what it represents
Supplier relationship management (SRM) refers to engaging in and maintaining strong relationships with 3rd party vendors. And to achieve this, you first need to establish a relationship with those vendors. How does one go about doing that? To begin, you need to find and partner with a cost-efficient and reliable supplier.
Although this might seem easy, it’s far from it. Like with moving companies, suppliers have grown in number in the last decade. Hence, making the right choice requires careful research. But once you do find the right supplier for your business, the time comes to build good partnerships with suppliers.
10 ways to build good relationships with suppliers
As hard to believe as this is, suppliers can have a huge impact on the development of a company. Whether it’s aimed at driving revenue or growing your moving business, suppliers can play a central role. On the other hand, cooperating with unreliable suppliers can cause a negative counter-effect.
Now, let’s move onto the top 10 SRM strategies and solutions for establishing a solid bond between your business and your suppliers:
#1: Make the right choice from the very start
We’ve already covered this, but it doesn’t hurt to mention once again. If you want to build good partnerships with suppliers, you have to start on the right foot. What does this mean? It means that you need to look past strategic and financial gain and analyze the entire picture. Consider the corporate differences and whether or not you might be able to count on support in future endeavors from the suppliers you partner with.
#2: Make sure that your partnership is mutually beneficial
This is business partnerships 101 – you need to look at a win-win solution. Otherwise, you risk long-term failure and expenses for both sides. So, make sure that your conflict management and problem-solving policies inside the company are up-to-date.
#3: Never take the experience and knowledge of suppliers for granted
The fact is that while you might be working with this one supplier only, they probably had the chance to work with all kinds of businesses. So, their input is extremely valuable in terms of staying ahead of the competition and avoiding mistakes. And if you wish to build good partnerships with suppliers, you would do well to remember this. Consult with suppliers and give them the floor to express potentially profitable ideas.
#4: Don’t overreach and expect impossible results
Part of running a business and growing it means to have realistic projections. So, the last thing you want is to force impossible targets on your suppliers from the very beginning. You need to provide them with honest projections and explore the tools and tactics they use. Remember, at the end of the day – it’s a partnership.
#5: You have to know what to measure and look for
Since it is a partnership, there is a matter of working together to mutually better your businesses. So, you need to take into consideration indicators that are specific to your line of business and include their role in it all. That way, you can easily sink your strategic objectives and ensure a proper flow of information on both ends.
#6: Why punish when you can reward?
When you want to build good partnerships with suppliers, it is always good to introduce a reward system. After all, people respond better to incentives than threats (which does not mean you should exclude either one). And so, why not meet fulfillment of pre-defined performance goals with a smile and:
- Constructive and positive feedback
- Financial rewards are always a sure way to build good partnerships with suppliers
- A larger share of the business
- A higher level of communication in terms of company processes and plans.
#7: Give criticism where criticism is due
Rewards are great…when earned. But what happens when suppliers underperform? That is the moment when immediate action needs to be taken. Bad service is something that simply cannot be tolerated and you have to establish that right from the start. You need to build your relationship with suppliers on the simple basis that outstanding work will be rewarded, whereas underperforming will be penalized. It’s a black & white world at the end of the day – you either succeed or you don’t.
#8: Backup plans need to exist at all times
Part of doing smart business means being prepared for any given situation and having a contingency plan in place. This means that you cannot rely on a single supplier. It is too great of a risk. If something were to happen to the supplier, you would be left to suffer as well. So, there is nothing wrong with having a couple of more suppliers on call in case of emergencies. In fact – it’s the smart way to do business. Always count on unexpected developments and consider how your company would fare. And this is something that you will find others will also appreciate in a business owner.
#9: Grow your image in the eyes of the suppliers
Having suppliers with good opinions about you can help you quite a bit in establishing long-term productive relationships. Ask yourself what your supplies value in their cooperation with your business and what they might want to change in future dealings. This will not only strengthen your relations, but it will also go a long way toward self-improvement and company growth.
#10: Finally, consider what you want in your suppliers
In order to build good partnerships with suppliers, you need to get your expectations in check. Just as you take into consideration the opinion they have about you, so should you consider what you think about them. Once you’re both on the same page, it’ll be all the easier to start solidifying your relationship and goals.
You should regularly evaluate suppliers based on key performance indicators—ideally ones you’ve developed in partnership with your suppliers and based on mutually defined objectives.