A company’s success is strongly linked to its suppliers’ strategy. Supplier Relationship Management (SRM) is the relationship between companies — the supplier and the supplied — and is absolutely critical for your company’s growth, innovation and budget control.
Think about your suppliers just like monarchs think about their kitchen staff. If you ever feel that they are unimportant, remember that they are the ones preparing your next meal. Why do you think kings and queens used to have food tasters?
Believe us, strong supplier relationships lead to glorious dinners. Sorry, glorious success. We got a little lost on the analogy.
Having everybody on board
COVID was obviously bad for most businesses and society overall, but there are always marginal gains in adversity. The pandemic made companies and facility managers realize that smart work is more valuable than long hours of work, and also that business activities are always human-centric, even when they are between two companies.
Having everybody on board with your plans for change is paramount for said change to occur in a hassle-free fashion. CPOs and Facility Managers need to bring maintenance technicians and procurement teams to their side, survey them, listen to their feedback and ultimately operate changes that result in higher well-being levels and more loyal employees.
The same is valid for business partners and other companies with which you interact. More on that later.
A study by WBR Insights & Coupa discovered that less than a quarter of Chief Procurement Officers feel they have enough metrics or data to measure the success and health of their supply chain.
Supply chain management is a tricky gain. While negotiating, margins are disputed and marginal gains might be important in the long term. There’s also the risk of supply chain disruptions, ultimately causing losses for both companies.
Every bit of data is noteworthy going forward and necessary to make informed decisions and communicate goals. With 93% of the CPOs saying that cost reduction is a priority, data-driven, collaborative platforms that support business relationships with suppliers are, therefore, of the utmost importance.
While you’re here, maybe you want to take a look at how to use Infraspeak to manage quotes, purchases and sales.
Less is more when it comes to SRM
Quality, not quantity, is the name of the game. The SRM game, we mean. As per PWC, the use of a few strategic suppliers is a lot more beneficial than trying to seek the cheapest solution in every transaction.
Suppliers are partners. It is better to buy a new good or service from an existing supplier and strengthen that connection. The most successful companies are the ones who manage their suppliers’ relationships with care and not as a byproduct of a negotiation.
Procurement officers will also thank you for not having to deal with dozens of different suppliers every single day and will focus on boosting your actual partnerships.
Communication is key
Supply chain disruptions, stock mismanagement, and lack of real-time information are some of the most damaging events for a business while dealing with supply partners. Communication is key here.
At the beginning of the relationship, clearly communicate goals, expectations, and processes. Suppliers are allies, and a missing purchase order is a loss of money, time, and trust. Have transparent, open lines of communication with the other company and see how misunderstandings will become a lot less frequent and detrimental.
📝 On this topic, read our take on how communication also drives better maintenance & facilities management. You may also be interested in knowing the main trends and challenges in FM in 2024.
As business partners, both you and your supplier might have an idea or two about the other side. A collaborative, company-to-company relationship might be just what you need to unlock growth and innovation.
Schedule a meeting with your suppliers, nurture the relationship and foster cooperative thinking that is valuable to both parties — there’s value to add everywhere, you just have to look for it, and a current partner can just be the perfect missing piece. Inspire yourself by reading our advice on how to communicate what you need from your employees.
Have common values with your suppliers
The post-pandemic, gen-z and gen-x world is a lot more fluid and sensitive to a company or brand’s values and mission. Customers and employees alike are seeking inspiration within their products and companies.
A relationship with a supplier, just like any other relationship, thrives on a shared set of values and an aligned vision. Don’t be so focused on financial gains and turn your head towards a stress-free, easy-going relationship with a partner that might as well be the defining line between success and failure.
Go for the long-haul relationship
Now that you have the data, the shared vision of the world/industry and the communication sorted, you’re in for a long relationship with your supplier(s). A Deloitte research on CPOs found that “high performers and agility masters perform better on a higher quality of [stakeholder] influence rather than just the quantity of sourcing-centric [spend] influence.”
Identify your main suppliers and develop a long-term strategy to keep them on your side with added value for both. Don’t do it like Boeing, whose strategy of constantly parting ways with suppliers ended up getting them years behind the schedule on orders.
To improve supplier relationships: key takeaways
Forging strong, transparent, long-term relationships with suppliers is great for everyone. Collaboration and communication are critical if you aim for innovation, growth and cutting costs whilst maintaining things running smoothly for your customers and procurement team.
The world is in a fast-paced change, the labour market is going through a crisis of labour shortage and inflation drove the costs higher than expected. The future is one of collaboration and teamwork, shaped by strong collectives performing in vibrant networks of like-minded individuals and companies.
When it comes to supplier management, supply chains and relationships, you need to realize that it really isn’t a zero-sum situation – everyone can come out on top by keeping customers satisfied and embracing innovation and sustainability.
Remember: just like man, no company is an island.
Extra tip: work collaboratively with your suppliers using Infraspeak Network™
Infraspeak Network™ is a shared workspace that introduces collaboration to procurement and work-execution processes between facility and maintenance managers and vendors, suppliers, contractors and facility service providers.
The Infraspeak Network™ simplifies everyday processes like quote requests and proposals, sharing work orders and monitoring maintenance carried out by suppliers. These newly enabled workflows allow you to do the following from the comfort of your Infraspeak platform:
✔️ Expand your Client/Supplier base and book of contacts.
✔️ Manage quote requests and agree on proposals for work orders and purchase of stock.
✔️ Execute contracted maintenance work more efficiently.