Friday, 29 May 2015

Making the most of your supplier relationship

In business, we all have suppliers. Whether they supply the transport to shift your goods from place to place or supply you with equipment, services or people, we all have them.  Your business relies on these people or organisations, but do we all know how to manage the relationship?  

Supplier or Partner?

Make a decision as early in the relationship as possible, whether you have a supplier / customer relationship or a partnership. A partnership will, like all partnerships, require involvement from both sides but should be a lot more fulfilling. You may be expected to share more about your future plans so that your partner can anticipate your needs and help you deliver.  If your relationship is customer / supplier based it will likely be more transactional and not deliver the same overall value to your organisation. However, each relationship should be evaluated individually as on occasion you only need a supplier.

Set expectations

Once you have decided upon the type of relationship, make it clear at the outset. If you want a partnership and the other party is not ready for that, it’s better to know early. Likewise, if you are just looking for a transactional relationship, but the other party assumes a partnership, that too can get awkward.  Clarity early on saves time and embarrassment later.


This is where any similarity to a personal relationship will probably disappear. To avoid any surprises, it’s best to make sure you have regular, pre-planned meetings with set agendas, as well as informal meetings.  These informal meetings could be phone calls, coffee or whatever suits, but a brief chat about how things are progressing could save a large amount of disappointment or embarrassment later.
Image result for supplier meetings


Ensure that the formal meetings are minuted. I would recommend that the customer minute these meetings so that there is no misunderstanding about actions and timeframes. Of course this will depend on your trust and relationship, but I have seen and experienced meetings where suppliers fail to document some of the more uncomfortable actions so that they get additional time the following month.  Any actions need to be clear, with agreed owners and agreed upon delivery dates.

It is also vital that minutes are circulated as soon after the meeting as possible, and that the agenda for all meetings includes a review of actions. Otherwise, why bother?

Keep the relationship as intended.

Obviously there may be occasions where a relationship changes from one type to another, and that is fine if both parties agree to it, but when it doesn't, you need to remember to keep things as they are supposed to be.  I would strongly recommend against conducting business when invited to events.  The provision of access to events can sometimes be used to influence decision making within customer / supplier relationships. It is often a different matter with partnerships, as it is in both party’s interest to be open and concentrating on the same outcomes.

So these pointers may seem overkill but by being clear throughout the relationship it can save those uncomfortable moments where one or both sides have failed to deliver something. However by following these tips, you will likely never need to revert to contract waving or termination.  That rarely adds value for either party.