How Do You Develop Strategic Relationships with Suppliers?

How Do You Develop Strategic Relationships with Suppliers?

How Do You Develop Strategic Relationships with Suppliers?

One of the most significant pieces when it comes to sourcing and procurement solutions is your suppliers. As you procure goods and services, you will have different levels and types of suppliers, and not all of them will be at the same strategic level, including the most trusted suppliers that you have developed a strong partnership with. 

Building up this type of relationship takes time, and it’s important to understand the difference between an approved supplier, a preferred supplier, and a strategic supplier, so you can mitigate risk and build stronger relationships with your strategic suppliers. Read on to learn more about strategic supplier management and how it fits in the supply chain. 

Sourcing and Procurement Solutions: What Is Supply Chain Management and Why Is It Important?

Before getting into strategic suppliers, it’s imperative to understand the big picture of supply chain management. Relationships with your strategic suppliers fit into procurement, and procurement fits into the supply chain, so everything must mesh for things to run smoothly. 

One of the more important things to talk about is the use of >information technology in supply chain management. This is an essential part of the supply chain, particularly the sourcing and procurement solution of strategic supplier management. Having the right type of supply chain management cloud software allows you to be more collaborative with all of your suppliers.

In particular, it allows you to build a stronger rapport with your strategic ones, as it bolsters transparency and collaboration. When you’re dealing with your team, it also promotes collaboration and should have analytics that can help you manage risk and make other decisions that can help improve efficiency and ROI.

Sourcing and Procurement Solutions: Identifying Strategic Suppliers

So, we know that strategic suppliers are important in sourcing and procurement solutions and in the supply chain, but how do we identify them? You’re essentially going to have three types of suppliers you’ll work with throughout procurement management:

  • Approved suppliers (vendors. This is a simple, tactical relationship.
  • Preferred suppliers. This is an ongoing relationship with a supplier you trust, but it’s unlikely to see long-term growth.
  • Strategic suppliers. This is a long-term relationship with a supplier that is likely to see growth.

In this vein, growth refers to having a shared vision and strategy with your supplier(s), shared values, and a shared mindset. What this leads to is a shared investment. The relationship between procurer and supplier can, at times, be combative, but working together helps both supplier and procurer, so it’s pointless to have combative relationships with vendors or suppliers. Of course, not all of your suppliers will have the same vision or share the same growth mindset as you, which is why you only will have a handful of strategic suppliers. 

Sourcing and Procurement Solutions: The Importance of Strategic Suppliers

There are many wells from which to draw in modern-day procurement. Understanding global sourcing in supply chain management as a viable sourcing and procurement solution and strategy is also important. While your global vendors may not be your strategic suppliers, reaching out globally can help extend your markets. Strategic suppliers are beneficial in part because they stress the importance of quality in supply chain management. Other reasons include:

  • Expanded research and development
  • Having a valued partner(s) who also wants to help you reach your goals
  • Transparency in operations
  • Supply chain resilience
  • Collaboration on new product launches

Having strategic suppliers is one of the more important sourcing and procurement ideas because you always need that handful of suppliers you can always count on when the need arises.Image of a handshake for an article about How Do You Develop Strategic Relationships with Suppliers?.

To learn more tips on sourcing and procurement solutions, or if you’d like a demo on supply chain management cloud software, contact us at EC Sourcing Group today at 973-936-9672. We want you to re-imagine the way you think about procurement.