Prime Advantage Blog

It's All About Relationships

Dan Grant on Oct 22, 2015 6:30:00 AM

Finding the right supplier is imperative. Making sure that the relationship functions for all parties involved is the rest of the battle. Many organizations don't have one touch point with their suppliers. They use the same source across multiple processes, facilities or geographies. Each end use could have a different priority and expectation. Agreeing internally about how to manage the relationship is important, but then you need to create a process to gather and analyze the different internal stakeholders' feedback. KPMG breaks down the internal steps in a recent Spend Matters blog.

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Once you have agreed on your internal measures, you need to communicate them to your suppliers. Here are a few points to consider:

  1. Analyze your portfolio of suppliers to understand where one could have a large impact on your business, positive or negative. Members use the group purchasing organization Prime Advantage to help that prioritization process.

  2. Focus on where you can make a difference. Take your energy and apply it to high impact relationships to keep a large portion of your business running smooth.

  3. Set your standards. Know the contracts that you have in place and make sure both parties are living by the agreement. Many companies file their completed contracts and go back to business as usual. Find a way to adhere to the deal so you can have a smart negotiation the next time around. If you don't have a contractual relationship, make sure you prioritize the deliverables of that supplier.

  4. Communicate your expectations to the supplier and try to work from the same playbook. After you agree to the rules of engagement then you both need to do your best to adhere and overcome potential issues as they arise.

  5. Measure your performance. Review your suppliers frequently and track their progress on a regular basis. Make sure you are communicating how they are performing. Don't wait until you have found a new supplier to communicate how your current supplier missed the mark.

Your partners can't meet your needs if they aren't aware of them. Make sure you set clear expectations and deliverables. When you hold suppliers accountable to your measures you can build a long term relationship that suits all of the stakeholders in your company.

Download the 2015 Purchasing and Manufacturing Survey from Prime Advantage

Topics: Supply Chain, Strategic Sourcing, Procurement

Dan Grant

Posted by Dan Grant

Daniel Grant is the President of Prime Advantage, a Chicago-based Group Purchasing Organization for mid-market manufacturers.

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