Supplier Relationship Management

No organization is an island; Caroline Booth, means that no one is purely self-sufficient, we have to rely on the other to get the ecosystem running. Procurement professional adds values in the business by monetary and Non-Monetary aspects. To be updated and find the best business opportunities a good procurement professional needs to build active business relationship with other external stakeholders and organization, not only building a supplier structure but also sway from their development of fresh ideas and business need which is also an emphasis on the pre-contract phase of the CIPS procurement cycle.

The supplier relationship is vital to get the new market trend, Product life cycle cost and stimulate new learning; experts say that the stronger the relationship would be, the more up to date you would be. It’s a ladder to competitive success.

Its often called supplier; “ A business partners”, because,

“ No supplier no Procurement and No procurement No supplier.”

Peter Kraljic in 1983 explained the procurement category and their level of importance and various levels of risk.

Buyer needs to understand the financial risk for the organization and the effect of the supplier they are trying to work with.

How can we manage a Rich Supplier relationship?

Relationship and especially a good relationship doesn’t happen overnight; it required a certain level of efforts and endeavour. As a procurement professional, you create a productive relationship by treating fairly and meeting them regularly. For me, it doesn’t matter if they are your strategic supplier or Routine supplier who doesn’t have any financial impact on your organization.

“Meeting with your regular suppliers or meeting your supplier regularly both have their own outcome.”

How about Open House OR Supplier Day??, Supplier can see their product or service and they can advise more efficient ways of using the product or service which can add values in the Total Cost of Ownership. By maintaining proper communication, your supplier can keep you posted for the trend and determining the best time to buy which can use to mitigate risk and avoid any uncertainties.

It adds some worth when you visit the supplier’s facility as often as possible. Apart from this, there are several ways to have a good relation with your supplier by certifying the supplier, maintaining credits or rating.