The value of relationship with suppliers

The relationship between buyers and suppliers is deserving attention by the B2B market and is increasingly important for business competitiveness. In fact, a 2016 survey by Fundação Getulio Vargas/celog indicates the relationship between buyers and suppliers as the second highest risk factor for Brazilian managers.

What must be considered when choosing a supplier?

With the evolution of the procurement market, some aspects are now really basic when choosing the best supplier. These include issues such as meeting product or service specifications, market value, reputation and, obviously, compliance with norms. These aspects can define whether companies are able to do business in accordance with compliance standards.

Supplier performance cannot be disregarded. Actually, a 2016 Bain & Company survey found that IT infrastructure customers, for instance, are more likely to purchase more than once from top performers; on average, 43% of respondents indicated a high repurchase probability.

Currently, ethical standards have also impacted the relationship between buyers and suppliers, as it’s no longer enough choosing the best price; it’s required to know if each company follows all the market’s ethical standards, and still retains the ability to deliver.

These standards go well beyond legal regulations, and must be aligned with values of the purchasing company, considering that supplier performance can impact the image of that company directly.

Another important aspect lies in planning procurement growth and assessing suppliers’ capability to increase production and preserve quality. It’s important to focus on partners who will help your business today and in the future.

Therefore, it’s better to look for those who can contribute to productivity gains and operational performance over time.

Relationship with suppliers

Business-to-business (B2B) relationships don’t must be necessarily restricted to buying and selling processes. It’s always interesting to look for partners who can collaborate, in a positive and proactive way, with the development of your business.

Information technology can be of great help in this sense, not only to optimize transactional processes and keep compliance, but also as a communication channel to foster collaboration between business partners. Some tools, for instance, can make it easier to display suppliers to buyers, as well as to create action plans for performance improvement purposes, along with a channel where suppliers can suggest process innovations and gains.

So managing a relationship with suppliers must go beyond negotiation, document control and the fulfilment of obligations required of suppliers. A sustainable relationship must be based on collaboration, in order to leverage results and minimize risks. This is the real secret of a lasting and promising coexistence that can benefit the whole chain.

And how is your relationship with suppliers? Leave your comment here!