Supplier Relationship Management


Our Resources Guest Article comes from Managing Director and Entrepreneur Michael Richards

We have heard over many years, of the importance of ‘CRM’, Customer Relationship Management.  Indeed it’s supported a whole software market and seen major global brands emerge.  But we hear very little about the importance of managing supplier relations.

Going back a few decades, Management meant being tough, decisive, driving a hard bargain and frequently, screwing-down suppliers to within an inch of their survival.  Thankfully, most of the overtly macho attitudes that existed then have rightly fallen away but even today, some organisations are infamous for how tough they are on suppliers.

In any business, some more than others, key suppliers are crucial to business success.  Aside from the obvious product suppliers/distributors, companies providing essential support and infrastructure also play a key role.  Indeed, there has been a strong trend in recent years to outsource many services and administration, meaning that good relationships with outsourced suppliers has a big effect on success.

So it might seem odd that many organisations treat such suppliers poorly, taking the position of ‘being the customer who shouts loudest’ or using veiled threats in demanding some action or other.  Of course, some industries are worse than others but these sorts of practices can be damaging to these important relationships.

Knowing your suppliers can go a long way to ensuring good relationships and having a little bit of empathy with what they do can significantly change things; much of the relationship can be built upon the language we use to communicate with them.

If our mind-set is ‘I am the customer, so you do as I say’, then the language we use will be wrong.  If, however our mind-set is more ‘with your help we can do a great job’, then the language may well improve.  For the supplier, there’s a gulf between hearing ‘I want this today!” and ‘is it realistic to get this done today?’.  You can be sure that the latter approach is more likely to add to the relationship and probably have greater likelihood of success.

As you get to know your suppliers better, try to encourage them to share their concerns about meeting your needs.  Find out what’s happening in their business, what immediate plans they have and what pressure-points exist.  You may even be in a position to help them or influence the direction they’re taking.  Find out what matters to them and consider how you could help them give you a better service.

Some of us are inclined to write to organisations when we receive a poor product or service and it’s a good practise, feeding-back valuable information.  But when did you last send a note to say ‘thank you’ for what a supplier does for you?

We all have the same issues of managing expectations for clients and juggling priorities and it’s when you need flexibility or a favour that the relationship that you’ve built with a supplier really pays off.

So try to achieve an imagined ‘preferred customer’ status and when you really need a supplier to pull-out all the stops for you, you’ll get the very best service.