Supplier Relationship Management by Jolito Ortizo Padilla

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There are many reasons to listen to suppliers. First, they know the product or service they sell to us better than we do. This means they are able to tell us whether we are buying in the right way or not. They can say, for example , if what we are specifying needs to be updated or is outdated. They can offer the best alternative because it is cheaper , simpler or more efficient. Suppliers can also tell us whether a purchase order provides enough information or is vague to the point of running the risk of receiving a product or service very different from what we had in mind.

Suppliers' innovation and creativity are focused on what they sell, which should be the same as what we sell. If you are a manufacturer , they will probably understand your manufacturing processes and could even suggest new products that you could develop using raw materials or parts that they supply. This would be an advantageous partnership for both parties. At a time when partnership is a keyword, having a happy supplier is very important.

Depending on whether we accept new ideas, suppliers can qualify our degree of openness and flexibility. They can  assess whether as an organization we are slow, bureaucratic or agile.They can even judge our relationship with staff. If a supplier also works with our competitors, we could gain indirect information about them. This is an important input for a competitve intelligence analysis. A supplier can also suggest potential customers for our products or services, or even give suggestions for new products  that fit within the our business , since in this way they can increase sales for their own organization.

It is important to understand whether a supplier knows enough about our company and our current and future products. It would be better still to invite him to participate in strategic planning, emphasizing integration , fairness and the transparency of relationships. Suppliers must be treated in the same way as we treat customers. We need to inform them of the improvement actions that we have decided to take so they are willing to respond to the next change. There is nothing more discouraging to a supplier than finding out that he has spent his time cooperating with us and nothing happened.

When developing a relationship with suppliers, a good idea is for someone independent from the purchasing process to carry out a satisfaction survey. A personal interview or a telephone call is the most efficient method because it allows a larger range of information to be collected. Questionnaires are restrictive and the answering rate can be very low. Furthermore, you don't know who is answering-the director may forward it to the manager, who in turns sends it to somebody else.

If a questionnaire is decided upon then it should not be too long, containing a maximum of 12 closed questions with grades to be assigned from 1 to 10. Add a handful of open questions, the last one for comments criticisms and suggestions.  I once saw a very direct question in a people satisfaction survey , "Do you think that we are actually using the results of this survey for improvement actions"? This of course would not be an appropriate question to ask a supplier.

When carrying out a survey , we must present the reasons behind it in order to motivate suppliers to contribute. A letter from a director or a manager should emphasize its importance, thank them in advance for their collaboration and let them know that they will be kept informed of the actions arising from the analysis of results.

So for many reasons it is important to listen to suppliers as well as to our customers. The concepts of customer relationship management can be easily translated to supplier relationship management .  Even better , it is worth listening to all interested parties such as employees, governenment agencies, opinion formers, communities and society. In short , we must listen to everybody that can, directly or indirectly, influence the success of our business. From here we can develop stakeholder relationship management, a much encompassing practice, to support continual improvement.