Building a strong collaborative relationship with your vendors can deliver a lot more than cost savings.
In my experience, every organization has vendors that it depends on.
The best relationships can provide:
- Critical supply chain information on availability and other market issues
- Insight about new or alternative products and services
- Product design and service enhancements
- Competitive intelligence
- Co-marketing and branding
- Joint venture opportunities
Vendors that are providing resources that go beyond price concessions will provide your organization with a decided competitive advantage.
If they don’t, the reverse is also true.
If you want to enhance your bottom line, I believe that it starts with a hard evaluation of your vendor pool.
It shouldn’t be necessary to look at every vendor to improve your position. It is likely that the 80/20 rule will apply but it may not in every spend category. You could group similar vendors to manage non-critical spend categories.
The hard choices will center on vendors that have been with you for a long time but may not be delivering the quality products or services they once did. We all appreciate loyalty and they may just need a jolt to get back on track.
Consolidation can have many benefits. Vendors that can get a larger share of your business will typically be motivated to deliver more benefits. A smaller vendor pool can yield nice gains in administrative and support efficiencies.
Several weeks ago, I provided some ideas on supplier management and vendor onboarding. If your system allows vendors to perform most of the onboarding steps, the evaluation process for new vendors will take a lot less time.
Your evaluation will be much easier If you can automatically collect information on products and services provided, delivery terms, geographic service areas, references, insurance and financial statements.
I would suggest that you have an open discussion with new vendors so they understand your collaboration goals. This should lead to a more rewarding relationship.
If you don’t think you have enough time to do this then consider that a lot of people take vacation in August and some that don’t take a mental vacation.
This is an important task will help your staff stay focused and productive so why not get started?
If you want to explore a purchasing or procurement topic in greater detail, I invite you to request 30-minute discovery conversation. In my experience the next step will be apparent at the end of the call. I never assume that my recommendations will be right for everyone, so don’t expect a sales pitch. You can reach me at (973) 718-7071 x875. The call will be forwarded to my mobile phone if I am not in my office, which is pretty likely.
Organizations of all sizes are reducing costs and increasing efficiency, without changing the way they conduct business. If you would like to know how, simply give me a call or send me an email with your contact information and the best time to reach you.
You Won’t Drift to Success©
Think about it.
Until Next Time, I Wish You Great Success in Your Business and in Your Life