There are many reasons why it’s important to maintain a great relationship with your supplier. The most important is that it makes day-to-day working more enjoyable for everyone. It can also get you a better deal, help with collaboration and strengthen goodwill.
But every supplier is different, and developing a strong relationship can be tricky. In this article, we explain how your business can create excellent supplier relationships, and keep them.
1. Be mindful of cultural differences
In an increasingly globalised world, it makes sense to work with global suppliers. If your supplier is from a different culture, do your research and find out what you need to know.
Working with international suppliers is standard practice in business. Be sure to do your homework so you can build a good rapport and solidify your relationship. For example, Chinese culture emphasises building a personal relationship ("guanxi") as a foundation for business relationships.
2. Communication is everything
Like most relationships, communication is vital. As Paul Noël, senior vice president of procurement solutions at Ivalua, explains:
‘Communication will create transparency on both sides of the channel and prevent hiccups or missteps, like incorrect inventory count or missing purchase orders.’
To develop communication, there needs to be established channels and a structure that facilitates effective communication. Noel continues:
'Having the right tools in place that allow both internal and external teams to quickly communicate and share documents and other information will help facilitate a more transparent, even-sided conversation.
If your business has the resources, consider creating a communication network with your suppliers. To rebuild their relationship with suppliers after developing a reputation for ‘tough tactics’, Tesco built a supplier communication network. In John Tarry’s words (the creator of the network), the community gives Tesco:
’The opportunity to improve communication, share ideas and continually improve the products that our customers enjoy.’
3. Set the tone as soon as possible
First impressions matter, so ensure you start your relationship in the right way. The first email, the first call – take the time to get this right. A lot of things contribute to the first impression. An example of this is tone of voice. 38 percent of people feel it plays an important part when making a first impression. Here’s a quick guide on how you can improve yours.
4. Understand your suppliers
Working with a supplier will be more effective if you understand them well. Through better understanding, you can work through challenges and develop a stronger relationship. The Harvard Business Review picked out Toyota and Honda as exemplars of this:
‘Toyota and Honda believe they can create the foundations for partnerships only if they know as much about their vendors as the vendors know about themselves.’
To improve your understanding, try to understand your suppliers’ business positions. Find out who their investors are and whether they’re publicly traded. Also, delve into their mission, their purpose, and how they operate. Armed with this understanding, you can better align your business with theirs, and grow together.
5. Ensure everyone in your business is on the same page
Even though you’re aware of the importance of a strong supplier relationship, others in your company might not be. If others aren’t putting your company’s best foot forward, you’ll constantly be taking two steps back.
To ensure everyone is on the same page, first be sure that you’re setting a highly-visible example, and second, hold training sessions to roll-out the new processes and principles.
6. Meet your suppliers in person
It’s an increasingly digital world – Facebook now has 1.47 billion active users. We all spend more time emailing, texting and on phone calls than we used to. That makes it all the more memorable if you can take the time to meet your supplier in person.
It doesn’t have to be a week-long vacation together. But a lunch meeting will help strengthen the relationship.
As well as meeting them in person, try to develop more than a ‘work-only’ relationship. We’re not talking about surprising them with roses, but instead about asking how their weekend was, and perhaps sending a Christmas card. A strong personal relationship with result in a stronger professional relationship.
7. Be as honest as possible
In a business relationship, there is going to be disagreement. It’s easier to manage these situations when there is an existing relationship based on honesty. Dave Blanchard, Senior Editor at Industry Week, explains:
‘As in personal relationships, the best supplier relationships require honesty when exceptions to normal operations occur. Companies should require immediate notification without penalty when critical supplier situations occur.’
When situations can be addressed honestly, solutions can be found. Express your desire for honest communication soon in the supplier relationship, and then keep your end of the bargain by always speaking as honestly as you can.
8. Set the example
It can be tempting to expect everything from a supplier: low prices, immediate shipping and on-time communication. But don’t forget that it’s a two-way street, and that if you want an amazing supplier, it’s important to set the example and embody all the characteristics you want to see in them. Dave Blanchard goes on to say:
‘Most companies focus on what suppliers can do for them rather than on what they can do with the supplier to lower costs. A true partnership leverages the total production cost to both parties' advantage.’
Conclusion – it’s a human relationship, not a digital one
A great supplier relationship has a lot of benefits, and taking the time to get to know your suppliers will make everyone’s lives a little more enjoyable.
A strong relationship will help you to navigate disagreements and problems. It will also make it easier to negotiate, and as you become their favourite client, you can strike a stronger deal. It’s in your best interest, then, to develop a trusting, human relationship with your supplier, one that stands the test of time and gets you the best deal possible.
