7 November 2021 The current moment has shown logistics managers how maintaining a good relationship with suppliers is essential for managing crises and unforeseen events. Faced with demand fluctuations, supply and transportation issues, establishing a transparent and solid relationship with the companies that provide goods has made a difference for many businesses. The truth is that, at any time, logistical success greatly depends on this, as a good supply service impacts not only the internal productivity of the DC but also customer service. Companies with efficient logistics rely on reliable suppliers and seek to establish a mutually beneficial partnership. Moreover, by prioritizing a good relationship, they are more capable of offering high quality and competitive prices to their consumers. Furthermore, companies that maintain positive relationships with their suppliers enhance their market reputation, opening opportunities for new and significant partnerships. Among the points that deserve attention are the pursuit of a lasting relationship with suppliers, diversification of the supplier portfolio, process alignment, communication, and openness to feedback. It may seem complicated to meet all these requirements and, above all, maintain a good relationship with all your suppliers, but if you follow the tips we will present in this text, you will have everything to significantly improve these partnerships. Take a look below: 1 – Try to establish an ethical and transparent relationship Your company’s suppliers should be seen as true partners in your business. Therefore, it is essential to establish a transparent relationship, based on reliability and commitment from both parties. When you are transparent, you encourage a healthier and more advantageous relationship with the supplier and can demand the same transparency from them. First of all, you need to outline your business objectives and clearly define your processes, which should be shared with your suppliers. It is also important to establish quality criteria and service levels, clarifying to the supplier the relevance of their role for the success of your business. An important tip is that your company’s teams and the supplier who will be in frequent contact should know each other and discuss how to communicate and resolve any issues ethically and transparently. With everything established in the contract and a good synergy between the teams, the relationship will tend to be the best possible. 2 – Evaluate and negotiate the conditions proposed by the supplier Before concluding a new partnership, it is necessary to evaluate all the conditions proposed by potential suppliers, whether related to prices, delivery terms, payment methods, transportation, among other important details. This will help you not only define the best partners for your business but also avoid expectation frustrations and future annoyances. And don’t forget what was said in point 1: the partnership must benefit both parties, meaning everyone should be satisfied with what was agreed upon. 3 – Demand clarity on the agreed conditions in the contract The fact that your company and the supplier see each other as partners does not exclude the need to sign a contract, with clear and well-defined clauses. This will provide legal support for both and make the partnership more organized. The contract should contain everything that both parties expect from the partnership, such as the description of the item or service, price, delivery terms, payment terms, communications, and so on. After preparing the document, read it carefully and, if possible, be accompanied by a qualified professional to advise you. Ask all necessary questions and leave no question unanswered. Partnerships are meant to work when you know your rights and duties, and also those of the supplier. 4 – For efficient communication, invest in technology If the contact between your company and the suppliers occurs via email and spreadsheets, you might create room for communication errors that cause a series of problems. It is not uncommon to see distribution centers with queues of trucks waiting to unload or even order breakdowns due to errors made in delivery or billing. To avoid situations like this, the most suitable solution is to have a platform to centralize all communications with the supplier in one place. You can purchase software that manages all receipt management and to which both your team and the supplier will have access. Thus, communication will be organized, and everything will be recorded, with easy localization of information. Another tip is to establish a communication plan, creating rules on how they should communicate and to whom to report each extraordinary situation. This should apply to both your team and the supplier’s team. 5 – Align processes Before aligning processes with suppliers, it is important to take care of your company’s processes, organizing them and keeping them efficient. You need to have a well-trained team and, if possible, software that helps in inventory and receipt management. With the WMS system, for example, you can know the right time for stock replenishment and the ideal quantity to order. Moreover, the system standardizes your processes, preventing failures and rework. With a receipt management system, all orders will be centralized and checked before delivery. This software greatly helps in centralizing and organizing processes with suppliers, ensuring greater efficiency in deliveries. 6 – Price is important, but quality is essential It is common to work with constant pressure to reduce costs, but what cannot happen is reducing expenses with what adds quality to your consumer. It is natural – and advisable – to negotiate prices with suppliers, discounts, payment methods. However, quality must guide any negotiation. So, more than the price, you should analyze the cost-benefit ratio of your supplier. Evaluate the quality of the goods they offer, their differentials, delivery method, deadlines, etc. All this will directly influence the experience your consumer will have and, consequently, customer loyalty. Choose the most efficient services for your business and realize that efficiency is a value and not just a cost. 7 – Be punctual with payments If you don’t want to lose your suppliers, the first step is to ensure payments are made within the agreed deadlines. This way, you will demonstrate that you are a reliable and easy-to-work-with client. If for any reason you are unable to pay by an agreed date, inform the supplier as soon as possible and try to negotiate a new deadline. Suppliers appreciate timely payments, just as you expect timely deliveries. 8 – Work with a diversified supplier portfolio When the coronavirus pandemic hit, many companies faced supply issues, and it was then that they realized the importance of having multiple suppliers. If you already have a good supplier, try to have a plan B or even C, if your business allows it. Unforeseen events always happen, with anyone and at any time, and the best thing is to be prepared for them. Additionally, having more options helps you during the negotiation or renegotiation of a contract. In other words, healthy competition among suppliers can be beneficial for your business. 9 – Use indicators to measure your suppliers’ performance One of the phrases we always mention around here is “what cannot be measured cannot be improved.” If you don’t follow the service level offered by your suppliers, you won’t be able to identify improvement points and charge them. Having indicators greatly helps in the relationship between your company and the supplier, as you will always be dealing with real data and requests. Try to define KPIs for both your team and the supplier, always thinking about your business objectives. In this case, having receipt management software can help a lot, as the system provides relevant data to verify the supplier’s punctuality, delivery accuracy, among other information that greatly aids in performance analysis. 10 – Prioritize long-term partnerships with your supplier Always think long-term! When you sign a new contract, ask if that supplier is ready to have a long-term partnership with your company. Therefore, both your company and the supplier will have the opportunity to make constant improvements that benefit your business. Moreover, as the partnership expands, the supplier learns to better understand their routine and processes, working and helping to reduce errors and rework. And, to prevent the supplier from becoming complacent, try to develop long-term goals, verifying their commitment. Finally, don’t forget: evaluate your suppliers well! Demonstrate your company’s satisfaction with the partnership and the results achieved, whether with praise, nominations, awards, or new contracts. This recognition brings even more motivation for the supplier to continue offering you quality service! Relationship with Suppliers: 10 Tips to Strengthen Partnerships Deagor WMS per ecommerce può aiutarti!