Studies show that healthy vendor relationships can significantly impact the bottom line. In Planning Perspectives, Inc.’s 2018 North American Automotive OEM – Supplier Working Relations Index® Study, researchers found that “the better the relations with an OEM customer, the greater the price concessions the supplier gives to them. More importantly, the OEM also receives greater non-price benefits, such as increased investment in new technology by the supplier, more sharing of new technology, ‘A’ Team supplier support, and more and better supplier communication that can help avoid and resolve problems more quickly.”
If you constantly run into challenges with vendors, here are a few tips to help build stronger, more productive vendor relationships.
Clearly explain your goals
From expected outcomes to important tasks that need to happen along the way, it’s important to ensure your vendors understand your overall goals for a project. Simply placing an order for a product or service loses its personal touch without insight into the broader objectives you’re trying to achieve.
Include them in the planning process
One of the best ways to ensure a vendor truly understands your needs is to include them in the planning process. In addition to getting more detailed information about the strategy behind a project, their insight and “outsider” expertise may lead to more creative solutions. Additionally, the vendor will feel a stronger sense of ownership for a project they had a hand in developing.
Make sure you understand their processes
Although you are the client, strong vendor relationships are still a two-way street. It’s important to ensure a vendor understands your company goals and processes, and you should also have an understanding of your vendors’ processes, as well. Whether it’s knowing the standard turnaround time for a large printing project or where to send payment for an invoice, taking the time to learn more about the vendor’s operational procedures will help address obstacles before they arise and save time and headaches in the long run.
Designate a point person
It’s much easier to ensure all communications between your company and a vendor are consistent and accurate if you designate a point person to serve as a liaison. When multiple people on a team start interacting with a vendor, it’s easier for conflicting or incorrect information to get passed along, which will only cause confusion and delays. And, depending on the size of your company, one vendor may work with multiple people or departments. So, a single point person or vendor manager is one solution to help create a more seamless process.
From meeting deadlines to delivering a quality product, as a client you expect a vendor to honor their commitments for the service you are paying them to provide. However, it’s just as important to building a strong vendor relationship that you honor your commitments, as well. Whether it’s having the specs for a specific project to a vendor by the agreed upon date or paying invoices on time, both sides have a responsibility to meet and exceed the expectations they set for each other.
What are some ways you’ve fostered better vendor relationships in your company? Let us know in the comments section below!