Vendor Management: The Complete Guide To Working With Suppliers
Vendor management may seem like a simple enough concept. But with the rapid grow...
With the global scale of the economy and the unlimited reach of the internet, you may think that supplier relationship management would be easier than ever. But finding the best fit can be challenging and can mean the difference between staying in the black and falling into the red.
In this article, the experts at Sling provide tips for improving your supplier relationship management and give your business every chance for success.
What Is Supplier Relationship Management?
Supplier relationship management (or SRM for short) is the practice of strategically planning for, managing, and optimizing all interactions with third-party organizations that supply goods or services to your business in order to maximize the value of those interactions.
In practice, SRM is less about simply coordinating relationships, and more about creating closer, more collaborative relationships with key suppliers in order to achieve new value and reduce the risk of failure.
Why Are Supplier Relationships Important?
We touched briefly on two benefits of supplier relationship management above — new value and less risk of failure — but within those general categories lies a whole host of specific benefits that can have a profound effect on how your business operates.
Your skills at SRM can influence such key variables as:
- Cost of good or service
- Quality
- Consistency
- Delivery
- Predictability
- Inventory management
- Innovation
- Transaction efficiency (e.g., speed, simplicity, transparency)
- Scale
- Logistics
Looking at this list, it’s easy to see how crucial supplier relationship management is to the success of your business. Without it, you could be working much harder than is necessary to ensure your team has what it needs to get the job done.
Tips For Improving Supplier Relationship Management
1) Think Of Your Suppliers As Partners
Supplier relationship management isn’t just about the bottom line. At its core, it’s about mutual trust and loyalty.
To cultivate that trust and loyalty, make your suppliers feel like they are a part of your business rather than just a source of goods or services.
Allow them to see “behind the curtain” into what makes your business tick. Give them insight into your processes, ask for their feedback, and get them involved in making your business run smoothly.
2) Pay Your Suppliers On Time
This may seem like a simple tip, but paying your suppliers depends on a number of moving pieces — not least of which is whether you get paid on time.
When you pay for goods and services on or before the due date, you prove that you are a reliable customer that is easy to work with.
Think about it this way:
Timely payments from you = timely action from them
That translates into a stronger relationship and a streamlined flow of products or services. But it all starts with paying your bills on time.
3) Communicate Regularly
Open lines of communication are a key part of supplier relationship management. Maintain clear and regular communication with your suppliers in order to:
- Keep them abreast of your strategies and plans
- Provide feedback
- Give them commendation
- Let them know if some aspect of your relationship isn’t working
When you foster healthy communication with your suppliers, they’ll feel more like you’re their partner rather than their customer.
They’ll also understand where they fit into your organizational strategy and how they can help your business reach its goals. That’s good for your business and theirs.
4) Implement A Supplier Relationship Agreement
If you buy from a supplier on a regular basis, create a Supplier Relationship Agreement so that both parties know what to expect from the partnership.
A clear and effective Supplier Relationship Agreement includes:
- Product description
- Price
- Payment terms
- Delivery terms
- Agreement duration
Work with your supplier to produce a well-documented agreement that satisfies both parties. Doing so will reduce the possibility of confusion and eliminate potential disputes.
5) Evaluate The Risks First
Before getting involved with a new supplier, always evaluate the risks first.
This usually involves getting references from other businesses and sitting down with the potential supplier to learn about their experience and areas of expertise. It can also be helpful to review examples of their work to determine if it’s what your business needs.
Then ask such questions as:
- Do they have the capacity to fulfill orders on time?
- Are they financially stable?
- Are they competitively priced?
- How do they handle emergencies?
When you have a complete picture of the risks and benefits, you can make an informed decision about getting involved with the supplier.
Supplier Relationship Management Helps Your Team
Maintaining healthy relationships with your suppliers gives your team a straight-forward and consistent process for purchasing. This allows them to spend less time worrying about supply logistics and more time focused on their key responsibilities.
Strong and stable supplier relationship management, coupled with reliable employee scheduling and communication, are the cornerstones upon which you build a solid and successful team.
The Sling suite of tools can help streamline your workforce management practices so you can give plenty of attention to cultivating successful relationships with your suppliers.
Sling’s calendar-based user interface is intuitive and easy to master, so you don’t have to spend extra time learning how to make the app do what you want. The onboard artificial intelligence even notifies you of conflicts and suggests changes to make the process go smoother.
And because Sling is a cloud-based platform, you can make your schedule available to your employees anytime, anywhere.
You can also use Sling to set reminder notifications for your employees so that they don’t forget their shifts.
In addition to powerful scheduling tools, Sling offers other advanced features, including:
- Time and attendance tracking
- Built-in time clock
- Labor cost optimization
- Paid-time-off control
- Overtime management
- Payroll reports
- Messaging and communication features
- Newsfeed
- Task list
These features give you unprecedented control over an inherently complicated and chaotic process and make it easier than ever to create the best schedule for your team and your business.
For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com today.
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This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.
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