Nurturing a valuable yet mutually beneficial supplier relation is often neglected by most businesses these days. Naturally, most companies focus on building brand loyalty and fostering ideal customer relationships. However, they fail to realize that a good supplier relationship is just as significant. According to recent research by Accenture, 63% of consumers consider supply chain traceability as a critical criterion for trusting a company, and they refuse to buy products and services from a company they do not trust.
The Importance of Supplier Relationships
Efficient Supplier Relationship Management (SRM) can have several positive effects on your business. First, purchasing essential raw materials and distributing products plays a critical strategic role in a company as it influences profits and effectively maintains an enterprise’s expenses.
Keep in mind that a company shouldn’t take supplier relations for granted or consider them one-sided. Instead, they should always run on mutually beneficial agreements. Every business organization should strive to create a win-win situation for both parties to develop a long lasting buyer-supplier relationship.
On the other hand, if supplier relations don’t turn out well, both parties tend to lose a great deal of time and money. Therefore, building and maintaining good supplier relations will create more excellent business value promote quality, innovation, efficiency, among a few benefits for the entire business organization.
The Four Essential Traits of a Good Supplier
A good supplier should be competent enough to make your product unique by supplying you with the specific materials you need. Therefore, you should always check whether they possess experience in numerous manufacturing processes. An enterprise should also consider the capability of the supplier to do more than its current needs and whether the supplier can scale up with its requirements.
The supplier’s quality is determined by the ability of the supplier to consistently manufacture your specific part or product at the highest quality. Therefore, it is best to understand and learn their step-by-step quality process and their certifications and testing procedures.
Communication is an essential component of business relationships, not to mention every human connection. A good supplier should promptly and consistently respond to your emails or phone calls and always keeps you in the loop. It is always better to let your supplier know about your preferences and frequency of communication, particularly during delays or manufacturing glitches.
Transparency refers to the readiness of the supplier to take up the responsibility and the ability to fix problems of all sorts. An enterprise should pick up a supplier with good references. A genuine supplier implements ethical business practices and transparently makes deals that an enterprise can trust. An authentic and transparent supplier lets you visit their facilities and meet the people in charge of the supply process.
How Suppliers Affect Your Bottom Line
A supplier has a significant role at every stage of the product lifecycle. Therefore, companies should work closely with the suppliers to source raw materials, ramp up production, and find a better way to fetch raw materials when the market hits saturation point. In short, companies need suitable suppliers to get the best out of their products. Therefore, a good relationship with the supplier relation can positively affect the bottom line or the net income, or the ‘bottom’ figure on an enterprise’s income statement.