Mr. Crunden shared three strategies for improving supplier relationships.
1. Develop a small supplier base. Relying on a wide supplier base can compromise an organization’s ability to maximize value through the supplier relationship, according to Mr. Crunden. Relying on a single supplier for multiple products reduces supply chain risk, allows for greater product visibility, helps cut costs and limits an organization’s necessary amount of deliveries.
2. Agree on performance-based goals. Organizations should set clear and achievable goals when forming a supplier agreement. Specific levels and metrics should be incorporated into the agreement so both parties know where they stand and what is expected of them. Companies should also monitor service levels on an ongoing basis to quickly identify and fix any limitations in supplier performance before they affect client delivery, according to Mr. Crunden.
3. Communicate effectively. Maintaining a regular dialogue with suppliers also helps organizations identify issues and opportunities for growth within the supply chain. Supply chain leaders should take the time to personalize their relationships and build trust with suppliers, which may prove beneficial in the long run if the supplier agreement needs to be renegotiated.
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