Procuring and building relationships with suppliers
The role of procurement is changing from simply managing costs to adding value, managing security, and building closer and more strategic relationships between suppliers and businesses. Shared visibility of goals and motivations along with closer business relationships with suppliers can promote mutual understanding and enhance your business resilience. It also helps to understand the limits of your business relationships.
Managing relationships with suppliers is fundamental to your business, and well-managed partnerships are essential for proper inventory management and inventory control. Your professional relationships should be built on a foundation of trust and transparency in order to ensure closer collaboration and to enable your business to run smoothly.
• Honest and open communication with your suppliers can be further improved by personal visits and face-to-face discussions.
• Standardised and easily understood ordering processes will help your suppliers develop trust in your business and act on any deviations that arise in timely manner.
• If you will have difficulty paying your suppliers within the agreed timeframe, let them know ahead of time to give them the opportunity to organise and adapt their internal processes and liabilities to accommodate your situation.
Make sure you review and evaluate your relationships with your suppliers and compare them with the relationships the suppliers have with their competitors. Keep track of ongoing business and any contractual obligations. This will help you to make any adjustments to suit your changing business priorities. Being aware of the supplier landscape helps you ensure your supplier relationships remain optimal, increasing the resilience of your business.
Resolving difficulties with your suppliers
During your business relationships with suppliers, you may sometimes encounter disagreements and disputes. These may be the result of a host of factors, both internal and external, such as changes in ownership or management structures, shifts in business strategy or market disruption. Problems that may occur with your suppliers include missed deliveries, supply of faulty or defective resources and unpaid bills. Make sure you deal with any disputes promptly and in good faith.
If you have difficulties managing your suppliers or vendors, determine which are critical as defined in your business plan [Link to Business strategy]. Identify the vital resources or materials that have the highest impact on your business. Assess which orders will be potentially affected. Evaluate inventory positions and manufacturing priorities as appropriate.
• Reach out to critical supply chain providers to identify their operational approach to providing vital products and services. Communicate with critical suppliers and understand their plans to fulfil and prioritise deliveries.