Regardless of which industry sector, your business operates in, no business can live without its suppliers. From office supplies to telephone systems and more, a healthy relationship with every supplier is essential to every working organisation.
Establishing strong, mutually beneficial long-term relationships with good strategic supplier relationship management is a critical step in improving performance across the supply chain. This will generate greater cost efficiency and enable the business to grow and develop.
Over the 27 years in which iCS Communications has operated, during many economic cycles, we have always maintained a healthy and mutually beneficial relationship with our suppliers.
With this in mind, we have noted some of the benefits of long-term supplier relationships and effective supplier relationship management.
· Increased efficiency and communication because of improved relationships, especially with more effective talking and listening. We make a point of getting on well with our suppliers and attend regular meetings with them
· Reduced costs through both parties being willing to avoid any unnecessary costs which may arise from re-tendering, re-negotiating or being forced to exit an existing contract early
· Better relationships through more effective collaboration. This leads to fewer reports of poor performance, which in turn leads to lower costs for managing the relationship
· Continual improvement and innovation can happen as a result of long-term partnerships which provide the opportunity for buyers to engage suppliers in a process of continual improvement of both products and services provided and of the accompanying service levels. We work closely with our manufacturers to develop a culture of continuous improvement and bring innovative telecoms products to the market
· Efficiencies through being in it for the long term. We have done business with most of our suppliers for many years. We have both developed a greater understanding of each other’s markets and the applicable business processes. This has enabled us to be more efficient and we pass these savings on to our customers
· Remaining competitive. Price fluctuations are a sensitive issue and a headache for any procurement colleague. It is better to have the correct price set out at the beginning of the contract to remove uncertainty
· Economies of scale. Streamline of the number of suppliers which allows for more effective relationships to be formed, costs are reduced and economies of scale are achieved.
Good relationships can be developed across the whole business and not just left to Procurement colleagues. Work as hard on building good relationships with your suppliers as you do building a relationship with your customers.