Importance of Supplier Relationship

Last year in  Q4 2019, I was one of the eminent speaker in Bangkok on “Effective Supplier Relationship”

Suppliers are key business partners who make a significant contribution to the success of our business.

The endeavor should be to build strong and resilient relationship with our suppliers which will provide competitive edge to “The Company” in the market place. In Sourcing process, three major stakeholders are involved, first one is Business, second is Strategic sourcing team  and third is Supplier. If all three stakeholders are not synchronized, there will be some knocking in the system which leads to customer dissatisfaction, poor quality, delay , rework and no desired output.

Three real life examples were cited in support of Supplier Relationship during my talk.

1. It is a marriage between the two identities

The selection of right partner is a critical aspect for the long term vision of the organization and the strong  relationship is based on three pillars viz;

# Trust is the First pillar of a successful partnership-In order to build the trust, it is important to have transparency between the two organizations. Organizations need to understand the capability of the partner ,scalability, understanding of the business requirement , deployment of the right  technology and ensure consistency in delivery.

 #Shared Vision is Second  pillar -Alignment of partner strategy with organization strategy in terms of adding more value and continual working to evolve new technology like Artificial Intelligence, Robo Process Automation to enhance the customer experience, cost optimization and efficiency. Strong foundation is an important element and needs to be nurtured through Collaboration, Commitment and Long term partner relationship in order to have continual growth and mutual benefits.

#Integrity is the third pillar -Integrity is a critical pillar for building the long term relationship, thereby creating a strong structure for deployment of policies and procedures with sufficient controls while executing business requirement.

2. Relationship between Thread and Needle.

Relationship is like Thread and Needle, as  individually neither  the thread nor the needle will be able to stitch or create any design but together in close collaboration can create innovative/unique design or Resolve problems and win laurels by meeting the customer expectation. In Thread & Needle relation at times supplier has to play the role of Needle as SME and sometime business (Client) has to take the lead as a Needle to fulfill the business objectives.

3. Relationship of two arms of a Scissor.

Relation is like two arms of a Scissor which needs to work in a very close manner to cut or get the desire results but an individual arm can’t at all be  a part of such process.

It means collaboration is an important link in buyer supplier relationship to bring Innovation, step upto customer expectations , enhance productivity & efficiency through elimination process of MUDA (remove non value added process or waste).