By Brian McKay
There are a lot of aspects which go into running a business effectively, and one of them is managing your suppliers. Despite what you may think, a supplier firm isn’t simply a business that you can but from and order around. You need to establish a mutually beneficial relationship with this entity, and take actions which will bring you both closer to your respective goals. If you’re a little worried for the state of your supplier relationships, here’s some advice for managing them more effectively.
The first thing you can do to improve the state of your supplier relationships is showing your suppliers that you’re a good customer. Remember that you’re not the only CEO in this situation. Just as you’re going to be keeping tabs on your supplier’s performance, they’ll be measuring yours. When you’re trying to prove that you’re a good customer to your suppliers, there’s only two things you really need to worry about. Firstly, always paying your bill on time. Payment terms should be worked out as soon as you place the order, and you should be sticking to them. Secondly, be sure to give all of your vendors the maximum possible lead time, and remain realistic in all of your projections.
The next thing which could help your supplier relationship management is reducing the number of vendors you have at one time. When you have too many vendors for your operation to handle, it can easily end up overwhelming you, leading to higher admin costs and lower efficiency. However, when you reduce the number of suppliers you’re using, and put a little more work into developing closer relationships with them. Instead of buying from three different companies that sell hoses, lubricants and fittings, you could go to a firm like Pirtek and buy all three. By shaving down the amount of vendors like this, you’ll find it much easier to manage your supplier relationships in a way that benefits both of you.
Finally, invest in some supplier relationship management software. This move might sound like it’s something of a cop-out, and it is! In fact, it’s among the most useful cop-outs you’ll ever come across when trying to improve your supplier relationships. With some decent SRM software, you’ll have access to some brilliant features which will perform all kinds of tasks for you. You’ll have constant access to all your suppliers’ up-to-date profiles, for one. You’ll be able to monitor and manage supplier performance, and also identify and acquire new, beneficial suppliers. Yes, keeping the number of suppliers as low as you can is a good way to make the whole process a little simpler. However, in a lot of business models, “as low as possible” really isn’t that low at all! When you bring in more and more suppliers, things can get very convoluted, but a great SRM system will make everything clear!
If you’re finding it hard to keep track of your vendors, I hope my little post has helped! Take this advice, and you’ll find managing your supplier relationships so much easier!
Brian McKay is a co-founder of zenruption. He has a B.A. in Political Science from Gonzaga University and an M.B.A. from Boise State University (yes that blue field). His goal in life is to look out for the regular guy and bring as much knowledge and change to this world as he can. His purpose in founding Zenruption was to do just that and help craft the world he wants his daughter to inherit. Please feel free to email him any feedback or article ideas at firstname.lastname@example.org. On twitter: @brianmckay71
On Facebook: https://www.facebook.com/briguy71