There is one thing businesses are prone to neglect: supplier management. The natural focus of companies is on fostering customer loyalty but that's not the only relationship you should be nurturing. A good relationship with your suppliers is just as important. In fact, it is so crucial not having one can make running your business similar to driving off road in a family car.Supplier relationship management (SRM) is one area all businesses need to become good at because it can have significant effects. In fact, adapting a more strategic approach with key suppliers can have immense long-term benefits for companies. A 2013 report from management consultancy Efficio Consulting showed that there are very few companies that are enhancing supplier relationships, despite the fact it's not easy to find reliable suppliers. As they play a major role in your business, it's crucial that you do everything you can to keep them on board and happy. Look at them more than just someone who supplies goods and/or services. They must be your allies because the kind of relationship you have with them can influence your success.Strategic Relationship Management (StrRM) is an advanced form of supplier relationship management that is widely considered advantageous for both suppliers and buyers. It's this strategic approach that helps companies develop mutual awareness of what's going on between them, find effective ways to communicate, and resolve issues efficiently. Here are just some of the benefits of having a solid relationship with your suppliers:
For you to meet your quote and provide excellent service to customers, you need to have the things you need on time. What's great about having an excellent relationship with your supplier is they will prioritize you. They will deliver the goods ahead of time. In addition, they'll make sure that you get the best goods. However, the benefits far extend to the production stage. You avoid returns, manufacture products quickly, and produce quality products that your customers will love.
It's easy to start the production phase when you have everything you need. And since you're assured that the raw materials are of high quality, the risk that you will have to stop production or reject finished products, both of which result in lost revenue, is greatly lowered. You'll meet your target without difficulty and will enjoy easier restarts after office relocation or other major changes to your company.
Another important result is customer satisfaction. Because you are able to deliver goods and services on time and free from defects, your customers will enjoy doing business with you. They will feel that their money is well-spent.
Customer satisfaction leads to stronger branding. By leaving a positive impression on customers, you're also letting them know that you're a name that they can rely on. This also gives them no reason to do business elsewhere. Since they're happy with your service, they'll stick around for more. They can even bring you new customers.
Good supplier relationships can mean that you can avail of discounts and other attractive deals. Good payment discipline can prompt them to offer you a cash discount, for example, if you settle the invoice within 30 days. Finally, they can decide to slash off a certain percentage of the goods they send you.
There will be times when you'll get damaged goods or delayed shipments. These are not going to make your work easier but you can easily resolve these issues if you have a good relationship with suppliers. Rather than being indifferent, chances are, they'll go beyond the bare necessities to fix your problem and compensate you for your trouble. This can be a life saver if such a mishap takes place in the middle of a reorganization or office relocation, when you will naturally have plenty on your plate.
In the long run, your business will be able to save money. Unexpected costs occur when there are delays or mistakes in production. That won't happen if you have the right materials and timely delivery of goods. Add to that the various discounts and incentives your suppliers can provide you with.Obviously, this is a two-way street. You can't expect the supplier to do all these favors out of nothing. You must be a valued customer. You have to:
Some of these may require some changes in your company policies. However, if done right, StrRM will bring substantial benefits to your business.Dealing with suppliers, customers, and other parties can be tricky, regardless of your experience. We can help you streamline your business processes so that you can focus on what’s important: Running your business. Contact Greenlight now.