Supplier Collaboration Strategies – buyer-supplier partnerships that are mutually beneficial — can yield significant business advantages and contribute to supply chain resiliency. Companies that collaborate with their suppliers in ways that create shared value often experience more growth, profitability, and customer satisfaction than competitors that don’t.
For buyers and suppliers to work together effectively, they must align their goals and develop a strong relationship built on trust. To be a true partner, the supplier must know what’s important to the buyer, understand how their input will make the difference, and deliver measurable results. In addition, the buyer must also provide clear and consistent communication that is based on mutual interest. This includes avoiding conversations that focus solely on pricing, compliance, and quality concerns.
Building Stronger Relationships: The Key to Successful Supplier Collaboration
It’s important to establish clear and measurable objectives for the program with key performance indicators (KPIs) that align with the overall business strategy. Buyers should also translate these KPIs into specific requirements, such as on-time delivery or innovation contributions. Finally, a buyer must ensure that their internal team is on board with the collaboration effort. Frequently, individuals in departments that are not used to working closely with suppliers will not be supportive of the program. It’s critical to enlist leadership from other departments in the procurement organization as well as senior management to help build credibility for the program and support the development of collaborative relationships.
Lastly, buyers must find incentives powerful enough to motivate their suppliers to engage with them in collaborative programs. For example, some buyers will offer investment capital in return for the supplier’s commitment to lower their costs. Other incentives might include giving the supplier access to internal data, such as cost information or R&D plans, which is crucial for a truly collaborative relationship.