How to Nurture Your Suppliers
Your suppliers will always play a big role in your retail operations, so don’t neglect them. Strive to find the best vendors in your industry, and once you’ve secured an agreement, maintain a healthy relationship through communication, professionalism, and good old fashioned niceness.
Building and, most importantly, maintaining good supplier relationships takes hard work, commitment and focus. And the longer they last, the more they require this careful nurturing to keep the love alive and the flame burning.
Just like a marriage, supplier relationship is not a one off event. There are levels of commitment and you have to keep working at it. If you’re not prepared and you don’t know what you’re getting into with a supplier it’s your fault. You need to make a commitment, and stick to it.
Why nurture suppliers?
To put in bullet form, nurturing leads to great supplier relationship and as a result the benefits below accrue.
- Full transparency between organization and supplier
- Improved collaboration between organization and supplier
- Streamlined and reduced sourcing activities and lead times
- Improved quality, manufacturability, and reliability for new designs
- Increased supplier responsiveness
- Increased customer satisfaction
- Increased awareness of supplier diversity
- Increased visibility of full supply base to procurement, quality, and even management departments
How do you nurture your suppliers?
Find the right suppliers
Building great relationships starts with finding the right people to connect with. Fortunately, in the realm of retail suppliers, there are plenty of sources that you can look into.
Begin the relationship with a supplier who is a close fit with your organization. This you achieve through careful supplier selection on your terms and conducting due diligence.
Work with suppliers you like
The value of supplier likeability is not to be underestimated. Taking company culture into account is so important when it comes to selecting suppliers, particularly if you’re forming a long-term agreement. People are very different and to work with people you like is a really good thing. When the culture is unfriendly it’s hard to build trust in the relationship.
Once you’ve selected suppliers to do business with, it’s time to negotiate and talk about the terms of your agreement.
It is important for your agreements to be well tailored to each of your individual supply chain relationships than forcing your suppliers to sign a standard document. It is cumbersome to tailor make the agreements but always saves time and money in the long run, and increases satisfaction.
Keep open communication
Talk to suppliers even when you don’t need to negotiate. Check in frequently with existing vendors to ask about their current state of business, priorities, plans for upcoming markets, launches, etc. Because these conversations will often be more relaxed, vendors will be more likely to share information more freely.
The single biggest pitfall for buyers in vendor negotiation is to talk too much and not ask enough open-ended questions. The can also reveal critical vendor information that can be used later.
Put it on paper.
Writing down not only your negotiation objectives, but why the vendor should agree, is one of the key differentiators between average and superior retail negotiators. Also ensure your team uses the standard documents (PO, GRN, Invoice, receipts e.t.c) to ensure adequate recording of transactions.
Involve them in your forecast.
Retailers sometimes do not know, or fail to adequately analyze, how much of a given product their consumers will likely demand over the coming buying phase. Suppliers then are left totally in the dark.
They need information for them to plan so as to deliver quality products and in a timely manner. Submit the necessary requirements and adhere to each supplier’s process will help maintain better relationships.
Be honest, prompt and thorough
It sounds simplistic, but honesty coupled with promptness can do wonders for your relationship with vendors. If something goes wrong, retailers need to reach out as soon as possible and explain the situation.
For instance when the quality of the merchandise is lower than expected, reach out to the concerned party as soon as possible and provides documentation (photos) to effectively communicate his message. This allows both parties to resolve the issue and move forward quickly.
Lowest cost sourcing option may offer up the most savings in the short term, it won’t necessarily be the lowest cost option for the long term. Consequently, it’s essential to analyze the total cost of an opportunity. Think through “other” costs that’ll come up as a “surprise” later on in the relationship.
Supplier development programs need to be a major focus of organizations with a supply base because they lead to better overall relationships with suppliers and will improve communication, quality, and timing as a result. This can be achieved through training, incentivizing, and rewarding suppliers.
Be an excellent client
You will be surprised at the number of businesses that neglect professional courtesies. Things like strictly adhering to payment terms and being polite and cordial when communicating go a long way in nurturing strong supplier relationships.
So what exactly does it take to be an excellent client? For starters, make it a point to pay on time.
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