What's essential for developing strong supplier relationships?

Enterprises need to leverage supplier relationship management tools in order to eliminate any logistical mishaps from occurring. 

Demand planning shouldn't go unacknowledged, but developing solid, thorough connections with overseas manufacturers will ensure someone else is taking extra effort to complete product deliveries. Unanticipated shipment problems can arise at any moment, and knowing others are working to mitigate the issue just as hard as you are can be valuable. 

Take a unique approach 

How is such a strong relationship developed? IndustryWeek contributor Dave Blanchard recommended professionals take a risk-oriented approach to the procurement process. Scrutinizing the strengths, weaknesses, capabilities and limitations of potential suppliers is a necessary first step to figuring out whether they'll be willing to help customers in dire times of need. 

Ultimately, manufacturers and other such companies are made up of people. As humans are opinionated beings, professionals have preferences as to which enterprises they would rather do business with. Sometimes, clients can be viewed as simply revenue-builders, not entities who are a pleasure to do business with. 

Essentially, strategic sourcing professionals need to develop empathy with their suppliers. They can do this by following two best practices:

  • Exercise transparency: If a supplier isn't aware of how a customer conducts business on a daily basis, it's going to make it that much more difficult to identify what needs to be done to deliver optimal service. In addition, whenever an enterprise acknowledges a pressing matter that needs to be satisfied, suppliers will be blindsided by the demand and may become embittered about the relationship.
  • Acknowledge they're human: Even multi-billion dollar corporations have shortcomings. No matter how impeccable a supplier's practices may appear, it has its own faults to account for. If a mistake or miscommunication ever occurs, realize accidents happen. However, this doesn't mean organizations should excuse conduct that's blatantly incompetent. 

What is e-procurement? 

There's no doubting the usefulness of a email, but there are more refined platforms available for enterprises to put to use. Supply and Demand Chain Executive Contributor Bob Cohen acknowledged the concept of connectivity, maintaining that real-time networking can do wonders for procurement operations. 

Establishing supplier relationships through cloud-based, e-procurement platforms has a number of benefits. Both parties can access invoice records, monitor distribution activities, sanction payments, orchestrate inventory management and complete a number of other tasks through such an environment. Best of all, the two organizations are never left in the dark in regard to where shipments are in the event a disaster transpires. 

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  1. When communicating performance expectations to their suppliers, most customers invariably tend to forget something very important. Customers seldom ask the suppliers about their (supplier’s) expectations. It is important for us to be the best customer just as we expect them (suppliers) to be the best suppliers. Supplier relationship is indeed a two way street. A cordial relationship can be established by helping the supplier through customer’s market leadership position. When expediting critical shipments, a Fortune 500 customer company can use their influence to help the supplier with their freight company or other service providers. I have seen suppliers bending over backward for such customers.