- The ones with whom you spend significant amounts of money (the traditional basis for determining who is important)
- Those upon whom you are highly dependent, who present significant risk if things go wrong
- Those who have some sort of capability, strength, technology, innovation, know-how, geographical presence or alignment with your future needs that could really help you
Why is social interaction so important?The answer is quite simple really. Companies don?t have relationships with companies but, instead, it?s the people in the different companies who form the relationships. No matter what measures or processes organisations put in place to depersonalise such arrangements, it ultimately comes down to people, and relationships between people need social interaction to cultivate them properly. The traditional rules for supplier engagements seek to prevent too much social interaction. As buyers, we are taught to be alert to suppliers trying to build a relationship with us. We are told to never accept much or any hospitality or, indeed, anything that might create a sense of obligation to them. Social interaction is typically limited to exchanging pleasantries at the start of a meeting. Clearly there is a need to be mindful of any corporate policies on what can and cannot be accepted from a supplier, but this can still be done. If you truly want to connect supply base possibilities with end customer needs and requirements to unlock the full potential for the critical few suppliers, then you need to adopt a new approach. A great of example of this is Apple. Apple didn?t create the iPhone by having a bunch of clever engineers and designers locked up in a lab for months. Instead, the next generation phone was developed collaboratively with a handful of key suppliers around the world who each brought unique capability and new ideas, and more importantly benefit, by putting everything into sharing this. For parties in companies to create value, they need to work together and get to know each other and be part of a single team. Teams get built because those in the team like and trust each other, and that demands social interaction beyond a verbal handshake at the start of a meeting. So, it doesn?t matter how much corporate provision is made to get closer to a key supplier. Unless the environment is created for those from each party to build a greater knowledge and understanding of each other through some sort of social interaction, then true partnership will not happen. To properly collaborate with a key supplier, the individuals who need to work together should go and have a beer on a regular basis, maybe even stretch it to a curry or two. They should also either share the cost or take it in turns to pay so there could never be any sense of obligation to the other. When individuals get to know each other, the business elements tend to take care of themselves and great things happen. At the end of the day, isn?t that what all companies want? Negotiating with suppliers: How to secure the best deal
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