What’s your relationship with your company’s suppliers? Are they distant but reliable or close but sometimes flaky?
How much do you know about the overall supply chains? These are all vital questions, yet many businesses don’t spend much time thinking about them. That’s because, too much of the time, we only pay attention to our relationships with our customers, rather than the connections that serve our businesses from start to finish.
It’s time for businesses to shift their attention to include the full scope of their professional relationships, from initial onboarding to the care and keeping of long-term connections. Better supplier relationship management can transform your business.
Standardize Your Structure
One of the simplest things your business can do to streamline your supplier relationships and management processes is to standardize how you document those relationships. Create a standard supplier profile that quickly allows you to evaluate what contracts they hold, what their terms of payment are, contact information, and anything else you need to know. Not only will this help you evaluate your relationship with each supplier at a glance, but it will also create a kind of institutional memory within your company.
If you’re not sure where to start with standardizing your supplier profiles, one option is to invest in supplier management software. Such programs not only track information but can also reduce risks along the supply chain by evaluating any compliance issues, establishing capabilities, and encouraging proactive risk mitigation.
Knowledge Meets Flexibility
When we talk about supplier relationship management, we’re not just talking about ensuring that you know who your materials come from. Managing those relationships is in large part about preparation for worst case scenarios. These systems address issues such as, how quickly you can respond right if you find out that one of your suppliers is in the path of a storm, or can you evaluate your options if a partner can’t deliver because of political unrest.
A good supplier relationship management system allows you to determine if your supply chain is at risk of disruption and to plan for alternatives. Particularly with enhanced AI capacity, today’s supplier relationship management system can alert your company to potential issues before they arrive so you have time to arrange for an alternative supply.
A Financial Advantage
Like many other business systems, one of the key advantages of supplier management software is that such systems typically include supplier portals and payment systems. Compared to analog payment systems and manual invoicing, such consolidated systems offer an up to date record of fulfilled orders, ongoing contracts, and receipts for payment. Suppliers largely embrace these platforms, but accounts payable departments have been resistant.
When businesses stop isolating supplier information and instead shift toward comprehensive systems, everyone has a greater sense of clarity and security, higher income, and lower risk – the biggest challenge is escaping the trap of how things have always been done. More importantly, though, when we lean too heavily on outdated systems, we limit our growth potential, and that may be the greatest professional risk of all.