How to create or fine-tune your Supplier Relationship Strategy as the world enters a new phase of the post-covid world!

As workers return to offices in some parts of the world, it is an excellent opportunity for business owners and their teams to sit down and review what is working and what is not in this so-called post-covid business environment.

Do you want to create or fine-tune your SRM strategy and develop partnership-like relationships with your suppliers and focus the supply relationship on your clients? Here is how:

1) Think about your company’s values and vision and how you want to serve your clients and hope to be perceived by them. How has the COVID pandemic impacted your clients? What are their 2021 needs and wants?

2) While your values and vision may be clear for your Client Relationship Management (CRM) strategy, your Supplier Relationship Management (SRM) strategy may not be so evidently focused on your clients. Ask yourself two questions a) how are you and your team living your company’s values and vision when you select new suppliers or interact with existing ones? And b) do your current suppliers know and care about your clients; if yes, how?

3) Create or update a supplier’s database to help visualize your findings. List all your suppliers, from those providing materials that directly affect your products, to goods and service suppliers that contribute to your production process. Add any attributes you consider essential to classify them. From characteristics of the relationship to who your suppliers are in terms of costs, quality and technology.

4) Look at your suppliers’ list and try to identify risks and gaps. Risk suppliers can lead to losing clients, sales and cash flow, sometimes imminently, and dealing with those risks should be prioritized. Gaps represent suppliers, or relationships with suppliers, that are not yet where you would want them to be, but you can work together to fill those gaps.

5) Create a strategy: Think about where you are right now versus where you want to be in the next 6, 12 and 18 months. Your SRM strategy will likely include categories such as the use of sustainable materials, you or your suppliers implementing clean production technologies, receiving and producing consistent quality products, understanding cost structures, being able to do timely deliveries to your clients, having shared values with your suppliers, fostering an innovative culture, having a collaborative approach, instilling a sense of urgency to your suppliers, and creating social impact awareness.

6) Transform your strategy into policies, procedures and KPIs: Policies describe what the company will or will not do in order to bring itself closer to the strategy. They declare our intentions and provide clarity so that the entire company can understand and follow them. Procedures are often based on policies and describe how the working-level team will operate. Key Performance Metrics (KPIs) allow the company’s leadership and its suppliers to see how the actual results of the operations compare with what we set out to accomplish. KPIs are overwhelmingly relevant in driving accountability.

7) Make sure to share your strategy with your suppliers and elaborate on how they play a relevant role in your company’s ability to make clients happy and increasing sales and revenues, and how you will keep each other accountable in making progress. If you can, even if in modest ways, try to mark and celebrate the start of your strategy with your suppliers, so that it has a “rite of passage” feel, then, keep your foot on the gas.

8) Look at the KPIs regularly with your suppliers, identify and implement improvement actions and measure again. Identify trends, try and learn.

9) Whatever you do, please don’t think that you can put your SRM strategy in auto-pilot. For sure, you can delegate roles and tasks; business owners cannot do everything by themselves, but neither can your suppliers; the world is far too complex for that. Remember that your client’s happiness is greatly in your suppliers’ hands, but it can’t be left in their hands.

As your company makes progress in knowing your clients better and create new products to serve them, don’t forget to review and fine-tune your SRM strategy as well. Adjust it to new challenges, introduce technology and automation whenever possible to optimize what is already in place, bring external experts that can offer new insights and perspectives, explore and keep learning. An SRM strategy is not a “nice to have” reserved for big corporations; remember, today’s big companies were once small. And often, you will find that their success of today relies on the lifetime effective partnerships they were able to create with their suppliers.

Thanks for staying with me until the end of the article. I send you all my gratitude and good vibes. May all your business initiatives be prosperous.

I am rooting for you!

By: The Ana Lovera Inc and Sourcing Values Editorial Team. Copyright 2022.

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Photo by John Amachaab on Unsplash