J♠️ Supplier secrets: Get more from your vendors 

Are you a business leader that needs to get more out of your suppliers? Do you need to get them to offer a better price? To deliver more promptly? To deliver more reliably? To produce a better product? To be more innovative? 

Yes, in today's competitive business landscape, building strong relationships with suppliers is essential for success. Effective supply chain management can lead to lower costs, improved quality, and increased efficiency.

Problem or challenge:

Your business might be struggling to get the most out of your suppliers. You may encounter challenges such as:

• High costs: Difficulty negotiating favourable pricing terms.

• Poor quality: Substandard products or services that do not meet expectations.

• Delivery delays: Inconsistent or late deliveries that disrupt operations.

• Lack of innovation: Suppliers that are not willing to invest in research and development.

Complexities:

Addressing these challenges can be complex due to several factors. The power dynamics between buyers and suppliers can influence negotiation outcomes. Building and maintaining strong supplier relationships requires trust and collaboration. The challenges of assessing supplier capabilities and ensuring they can meet your needs can be difficult and so is understanding and managing complex contractual obligations.

Solution: 

Everyone talks a lot about sales skills and developing the capability of your salespeople to negotiate with potential customers and to get the best deal. Listening to customers, understanding customers, understanding their needs and their drivers. All these things are talked about when you talk about sales skills.

Actually, all those skills are just as valuable when you're dealing with suppliers. Yes, you might think they need you as a customer, and that's true. But if you really want to get the best deal out of your suppliers, use all your sales skills. 

Understand their needs. Understand what's important to them. Understand what drives them. Explain to them why you're a good customer, just as you would explain to a potential customer why you're a good supplier. 

Provide them with non cash help, such as references, case studies. It all may help you get a better price, a better service, a better product. Whatever it is you need for your supplier.

To improve your relationship with suppliers and get more value, consider the following strategies:

1. Build strong relationships: Invest time and effort into building strong relationships with your suppliers. Foster open communication, trust, and collaboration.

2. Understand supplier needs: Take the time to understand your suppliers' business objectives and challenges. This will help you tailor your requests and negotiate more effectively.

3. Offer value: Demonstrate the value that you bring to your suppliers. This could include providing references, case studies, or other forms of support.

4. Negotiate strategically: Use effective negotiation techniques to secure favourable terms and conditions. Be prepared to walk away from a deal if it doesn't meet your needs.

5. Monitor and evaluate performance: Regularly assess your suppliers' performance and provide feedback. This will help to ensure that they are meeting your expectations.

Benefits:

By implementing these strategies, you can expect several benefits, including:

• Lower costs: Negotiate better pricing terms and reduce costs associated with quality issues and delays.

• Improved quality: Ensure that suppliers are providing products or services that meet your high standards.

• Increased efficiency: Streamline operations and reduce disruptions caused by supplier issues.

• Enhanced innovation: Encourage suppliers to invest in research and development to provide innovative solutions.

• Stronger partnerships: Build long-term, mutually beneficial relationships with your suppliers.

Why it works:

Building strong relationships with suppliers is essential for achieving long-term success. By understanding their needs and offering value, you can create a more collaborative and productive partnership. Effective negotiation and performance management can help to ensure that your suppliers are meeting your expectations and providing the best possible value.

Measurement:

The effectiveness of your supplier management can be measured through various metrics, such as:

• Cost savings: Track the amount of cost savings achieved through negotiations and improved efficiency.

• Quality improvements: Measure improvements in product or service quality.

• On-time delivery: Monitor on-time delivery rates to assess supplier reliability.

• Supplier satisfaction: Conduct surveys to assess your suppliers' satisfaction with the relationship.

• Overall business performance: Evaluate the impact of supplier relationships on your overall business performance.

My story:

This thinking comes from my own experience running a training business. And discovering that many of what I thought were ‘our’ customers were actually buying because of the accreditations we had with our supplier. In other words they were buying based on our supplier’s brand not ours. So to succeed we needed our partner to succeed.

I’ve since noticed the same in many industries. Why do people buy from the local McDonalds franchise? It’s unlikely to have anything to do with the franchisee. It’s an extreme example but it shows how important your relationship with your supplier can be.

Call to action:

By implementing these strategies, you can improve your relationship with suppliers and get more value from your partnerships. Take the time to build strong relationships, understand your suppliers' needs, and negotiate effectively. By prioritising supplier management, you can enhance your business's overall performance and competitiveness.