Procurement Best Practices 4: Strategic Partnerships With Suppliers
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An essential part of creating and implementing a good procurement management plan is to nurture a true partnership with suppliers. Successful companies realize that suppliers are integral to company growth and directly affect the bottom line. Please note that creating a strategic partnership means that your company isn’t just focused on your own success, but is also actively involved in contributing to the success of the supplier as well. This requires that the global procurement manager view each supplier as more than just a place to purchase goods and services.
A partnership means that you will look out for the supplier as much as the supplier will look out for your best interests. Studies have shown that companies that have developed strong relationships with suppliers get good or above average customer service than those who only see vendors as commodity providers. Therefore, it is a smart move to work to build bridges with vendors so that they understand your company goals and objectives intimately.
The first step is to seek out vendors that are a good fit for your organization. Selecting a vendor just because they are popular with other companies, or have the lowest price, is not going to be in your best interest. If a vendor shows little interest in your company’s success, or doesn’t prioritize top rate service, it is best to look elsewhere. Find a core group of suppliers who share in your vision and who are willing to do whatever it takes to help you achieve cost efficient purchasing goals.
An experienced procurement specialist can be enlisted to help you sort through various suppliers and evaluate their desirability. Your procurement plan should also list how well you are able to meet supplier goals. Vendors will be more willing to meet your needs if you focus on the following: increasing sales, reducing payment cycle, reducing complexity and long-term contracts.
Increasing Sales – Provide your supplier with a testimonial that helps to boost their sales.
Reducing Payment Cycle – Commit to paying your vendors quickly, which helps to increase their cash flow.
Reducing Complexity – Eliminate tasks that cause your supplier to waste too much time and money. If you have unique requirements, discuss how both parties can make the processing of your order flow smoother.
Long-Term Contracts – As part of a mutual partnership, it is a good idea to commit to a multi-year contract so that the vendor has more incentive to be fully invested.
Related Posts:
Procurement Best Practices 5: Nurture a Culture of Improvement
Procurement Best Practices 6: Implement a Cross-Functional Approach
Procurement Best Practices 7 : Smart Use of Advanced Technology
