Business Advice, Business Planning, Management, Supply Chain

The Importance of Supplier Relationship Management

Business Advice | 12 April 2023 | 1 year ago

Regardless of the type of business or the industry that you work in, there is a high chance that you need to use suppliers. This could be who you get raw materials from, or if it could be another business that provides you with an important service. To ensure that the relationship with your supplier is a good one, you need to put time and energy into supplier relationship management. Below, we have taken a look at what this entails.

What is Supplier Relationship Management?

If you have worked with suppliers before, you will know how important it is to have a supplier that you can rely on. You need to be able to relax, knowing that your supplier has everything handled on their end. However, this isn’t something that happens on its own, and supplier relationship management takes work. Supplier relationship management means managing and optimising relationships with your suppliers, vendors and any other business partners that you work with. It means getting the most out of your professional relationship, and making sure that they are benefiting also. It’s not enough to simply select a supplier or vendor and hope for the best, as this is unlikely to result in a long term business relationship.

What Does Good Supplier Relationship Management Look Like?

There is a lot that goes into good supplier relationship management, and it’s not something that is achieved after one or two tasks, nor is it something that happens overnight. It relies on attentive, clear and friendly communication. It’s important to keep your supplier up to date, informed and in the loop with your business. They shouldn’t be left wondering what you meant by something, and they shouldn’t find dealing with your business stressful. They should know what you need and what is expected of them at all times. Effective contract negotiations, performance monitoring, supplier selection and cost control also make a big difference. The key is to ensure that your supplier enjoys having an ongoing relationship with you, and that it’s mutually beneficial. Otherwise, the relationship might not be one that lasts very long.

Why is Supplier Relationship Management So Important?

There are a number of reasons why you should focus your attention on supplier relationship management. For example, keeping suppliers happy can earn you mutually beneficial relationships and benefits such as discounts, priority and flexibility. These benefits are unlikely to be presented to you if your supplier relationship is poor or distanced. Plus, good supplier relationship management reduces supplier turnover, which can result in saved costs and less disruption further down the line. Supplier relationship management makes everything simple, straightforward and beneficial for both parties.

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