What kind of relationship do you have with your suppliers? Do you maintain an ongoing correspondence, or is it more or less a relationship that is exclusively transactional in nature?

In a post-COVID world, supplier relationships are more important than ever. While hundreds of thousands of businesses did not make it through the pandemic, forced to close due to mounting costs and a lack of cash flow, others survived, often through a combination of good fortune and strategic cost-cutting.

Still, many can't help but wonder: What if? What if the materials I need from my supplier were to suddenly not be available? What what would my company do if my supplier went out of business?

The key to ensuring ongoing supply — and being cognizant of supply chain bottlenecks — is by maintaining a relationship with your supplier(s).

Here are a few tips that supply chain management experts put together for Harvard Business Review. While the piece was written back in 2004, the tips they offer are every bit as applicable today as they were then:

1. Become more well acquainted with your suppliers' processes
Understanding the ins and outs of what goes into creating a microchip or crop cultivation gives you a better appreciation for the work that goes into it and why delivery takes the amount of time it does.

As Harvard Business Review contributors Jeffrey Liker and Thomas Choi point out, supplier relationships are founded on mutual understanding and becoming as intimately familiar with your suppliers' processes as they are. This entails research, study and being on site — on the factory floor — when production processes are underway.

Do you know how your suppliers create what they do?Do you know how your suppliers create what they do?

2. Diversify your suppliers
Among the biggest mistakes retailers, restaurans and other businesses that rely on suppliers made during the COVID-19 pandemic was putting all their supply eggs in one basket. So when their suppliers had to shut down, it compromised sales.

Supplier diversification not only lowers risk, but it also encourages competition. As Liker and Choi noted, supplier competition incentivizes producers to perform in a way that will result in a new contract or extend an existing one.

3. Supervise suppliers if you can
Being on the scene when producers are engaged in their work not only gives you a bird's eye view of their processes, it also allows for supervision. This supervision isn't necessarily done to ensure that they're doing their job but to offer feedback, advice or support. According to Choi and Liker, automakers are known to send report cards to their suppliers to communicate problems with delivery, performance history and words of encouragement or gratitude.  

4. Know the lingo or develop your own
Depending on your business, some of your suppliers may be overseas, and your points of contact may speak an entirely different language. Conversations that are lost in translation can lead to unnecessary confusion and unfulfilled orders. Liker and Choi recommend establishing a common lexicon or relying on verbiage that everyone understands, which allows key stakeholders to stay on the same page.

By implementing these suggestions in tandem with strategic information sharing and joint improvement activities, you can maintain a more reliable supply that is grounded in better communication.

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