How well do you know your suppliers and how well do they know your business?
To be successful in procurement it can be helpful to take a similar approach to a sales executive.
I spent a significant part of my career in business development roles and the steps to creating success in your procurement role compare favorably.
Success in sales is typically based on:
- Being a student of your company’s strategy
- Understanding and fulfilling the goals and objectives of your customers
- Building trust through performance and adherence to promises
- Open communication
- Delivering unwelcome news as soon as you know and immediately offering alternatives
- Appreciating success but guarding against complacency
- Avoiding the temptation to sacrifice long-term success for short term gains
Consider this brief list. All you really need to do is to change customers to suppliers in the second bullet and you will have a blueprint for strategic sourcing success.
So how can you learn more about the goals and objectives of your suppliers?
It won’t be easy and it will take a commitment of time and resources.
If you have read my posts in the past then you know that I am a proponent of the 80/20 approach. This works for me and helps to keep projects and initiatives manageable. We all have enough on our plates.
As a first step, I would Identify key suppliers that can impact profits and support the growth of your organization.
Then I would ask the following questions to begin evaluating the relationship:
- How much have we spent with each one in the past five years?
- What percentage of our business do they have in each category?
- Who are their key people and how long have we worked with them?
- When was the last time we visited their facilities?
- How often have they visited our facilities?
- Are they growing or consolidating?
- How important is our business to them?
- What innovations have they proposed in the last six months?
- How quickly do they respond to corrective action requests?
- Do we know their biggest challenges in supplying our account?
- Do they supply any of our key competitors?
- Are they proactive in managing our account?
If you know the answers to these questions you are way ahead of your competition. The opposite is most likely true.
Most of your suppliers are working to build their business and are facing challenges like yours. Some are struggling to survive.
Many times, just asking the following question is all you need to do to start building a stronger relationship.
“What can we do to make our businesses grow together?”
Your suppliers can be a powerful resource that is often underutilized.
Get to know your suppliers better and remarkable results will follow.
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