Supplier
is a central point of procurement activities and processes. But, it is
surprising how few organizations really think like that. Yet the performance of
a supplier has a huge impact on an organization’s success and will ultimately
determine how the procurement function and its leadership will be regarded by
the business. Suppliers are more important than ever in today’s economically
uncertain times – particularly when that business relies on its suppliers to
bolster its own image, reputation and bottom line. A supplier’s price, quality,
reliability, technology, and industry knowledge can offer a business an
advantage over its competitors.
Procuring
budgets are becoming ever tighter, businesses are being required to cut costs
and look for the lowermost possible prices, leading to awkward conversations
between businesses and their suppliers, and employing pressure on their
relationship. Balance must be found if corporations are need to meet their
business objectives while remaining on positive terms with their suppliers.
But,
although businesses may, by necessity, become more demanding of their
suppliers, they can avoid being perceived as difficult by ensuring transparency
and reliability in their relationships.
A
strong start is crucial in building up a new relationship that enables both
supplier and purchaser to get the most out of their partnership. A level of
transparency can be firmly established from the start by making all prospective
suppliers aware what will be expected from them during the initial
qualification and selection process, and beyond.
Once
suppliers have met the purchasing company’s qualifying criteria, contract terms
should be negotiated, including clearly stated expectations in terms of
product, timeframe and price. A supplier is more likely to trust a customer
that pays on time, this is the reality that supplier can work as your
additional hand if you response fair to them they will always response you
virtuous and favorable which ultimately drive to the cost savings.