5 Tips to Supplier Relationship Management Success
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By Morgan International Staff Writers
Particularly for our top tier vendor relationships, we spend a significant amount of time agreeing what the relationship will look like – typically via commercial and contract negotiations. However many organisations fall down on managing that supplier relationship on an ongoing basis, and therefore miss out on a large amount of value add.
- It is reciprocal
The R is in SRM for a reason, and an authentic relationship is based on trust and reciprocity. Work to strengthen key relationships. Listen to your suppliers and get them involved in the processes that ultimately will result in your joint successes.
- Don’t leave any stone unturned
Aim for as close to full supply chain transparency as possible. If your suppliers are reliant on other suppliers to deliver your goods and services then you should be confident that they are managing them well.
- Be partners
In time, many businesses actually become partners, sometimes formally in joint ventures. Just because a vendor starts out as under your control via a contract, do not dismiss the future possibility of growing that relationship further.
- Use balanced scorecards
For key relationships it is really useful to agree to periodic meetings where services can be reviewed. It may be appropriate to agree a balanced scorecard that covers both quantitative and qualitative measures for the vendor to report on.
- Share your plans
Within reason, you should look to make your tier 1 suppliers a part of your future by discussing your strategy with them and getting them involved.
There is significant value to be created from supplier relationship management. To be effective it must be done robustly and consistently using our tips above to boost your chances of success.