Updated: Nov 6, 2019
With more emphasis on procurement to find way to reduce operating costs it is important to look behind the norm of buying based on price but more on building relationship with your suppliers.
In my 30 plus years in procurement/purchasing and having worked on both sides of the fence I have seen what I call a “canyon” between purchasing department and suppliers.
The most common reason for this canyon is the lack of understanding of each other working processes and expectations which often comes from poor communication between purchasing and suppliers.
Bridging this canyon can be achieved with a few simple steps.
Here are 5 simple tips that you can adopt very easily that will help achieve both costs saving and improved relationships between purchasing and supplier
1. Have regular meeting with your suppliers to help them understand any issues you may be experiencing dealing with them and discuss those issues with the aim of finding a solution that will benefit both parties.
Some time it is best to invite your supplier to your office instead of waiting for their next scheduled visit to discuss any problems.
2. Every 2 or 3 months plan regular site visits to your supplier’s premises, this will give you a better understanding of their operations, what they do and how they operate.
Not visiting your suppliers you have no idea of their capacities or if there are the right supplier for your organisation, on the other hand you might find they provide a lot more products or services the you originally thought.
3. During supplier visit have a look at what stock they hold, you might find a product or similar product that you regularly use is kept by your supplier as a standard stock item. It could save you money or even reduce your own stock holding.
4. See if there is any thing you can do to help your supplier perform better when fulfilling your orders. This could be as simple modification to your own processes that could improve your supplier deliveries on time which in turn would benefit you.
5. Have a supplier performance rating system in place and reward suppliers for performing to your expectations, standards and for achieving your targets. This does not mean giving them cash, but the reward could be in the form of more orders, or include them on your tendering list for future supply contracts, another way to reward then is once a year have a presentation night awarding your top 5 suppliers with an achievement certificate or trophy they could display in their office.
Spending time working with your suppliers, building bridges over canyons is not that difficult, it only takes a little effort and imagination that can be rewarding on both sides and create a long-term working relationship that can be financially beneficial to your business.