Building an agile supplier relationship is nearly impossible without the right management strategy.
Robust supplier relationship management strategies can make a big difference.
Instead of continuing to rely on legacy vendor management operations, it might be time to switch to newer, strategic supplier management best practices.
By adopting the latest modus operandi you make it easier for all to communicate and work more effectively.
So, how do you go about building successful vendor management relationships?
We’re going to discuss three methods, but before we do, let’s first understand what strategic supplier management is.
What is Strategic Supplier Relationship Management?
Supplier relationship management according to the Chartered Institute of Procurement & Supply (CIPS) is:
“…The process for identifying all interactions with key suppliers and then managing them in a way that increases the value from the relationship for both parties….”
And ‘strategic’ simply means well-thought-out, planned, tactical, deliberate, and calculated.
Therefore, strategic supplier management is the deliberate effort made by a buyer to forge a long-term mutually beneficial relationship with a vendor or series of suppliers.
With that out of the way, let’s ponder more about the need to invest effort in cultivating stronger supplier vendor relationships.
The Case For Investing in Your Supplier Relationship Management
Why should procurement teams be concerned about supplier relationship management? What’s in it for them?
Well, vendors are your gateway to what’s happening in the markets. They have their fingers on the pulse as it were, and can furnish you with insights on market conditions.
This can in turn help you streamline sourcing in supply chain, mitigate supply chain risk, as well as reduce overall procurement spend.
The effort put into cultivating better supplier relationships and improving vendor management will be rewarded in time.
So, what are some of the best techniques you can use to establish such alliances?
Here are three of them.
Strategic Technique #1 Curated Supplier Identification
If you plan on establishing long-term relationships with suppliers it’s imperative that you get things right from the beginning.
What do we mean?
Building a good rapport with vendors begins during the supplier identification sourcing process.
It is at this time that the right suppliers – those whose values sync with your own – are identified.
Messing up during the supplier identification stage can result in frustrating situations that could have been better avoided.
This process can be greatly improved by adopting robust RFI software that enables you to quickly evaluate, compare and contrast various vendors at once.
Strategic Technique #2 Engage Suppliers in Strategy Sessions
Do you want to know the best way to flatter your vendors?
Bring them into your confidence and allow them to see the important role they play in your supply chain.
How can you do this?
By reaching out and engaging suppliers during key strategy sessions where their particular product or service is involved.
Give them room to share their expertise.
It could give your enterprise a competitive edge. Of course, appropriate Non-Disclosure Agreements should be in place prior to inviting them to listen in and offer suggestions during your sessions.
Strategic Technique #3 Leverage Procurement Technology
Do you have Service Level Agreements (SLA) in place with each of your suppliers? Are they spread out across different CRM or perhaps even Excel spreadsheets?
When you’re working in a fast-paced world that’s ever-changing, visibility of contracts is key. Procurement and sourcing teams shouldn’t have to spend valuable time trying to locate supplier information.
By leveraging procurement technology such as contract management software and reverse auction software from ProcurePort, teams can save up to 40% on addressable spend.
Conclusion
Strategic supplier management is all about improving the vendor-buyer relationship.
The methods mentioned above are powerful and proactive ways to facilitate this.
Armed with this knowledge and vendor management solutions such as contract management and procure-to-pay software from ProcurePort, you can now raise your supplier management game to the next level.
Why ProcurePort?
ProcurePort is one of the leading providers of the best supplier management software on the market and is trusted by enterprises and organizations such as UNOPS, HUD.GOV, and conEdison.
If you would like to discuss supplier management software with a consultant, or to schedule a demo, contact us today.