There was a time when suppliers of major manufacturers had little control over their product or how it was produced. The big manufacturers told them what to do and how. Suppliers were in a submissive relationship with the big manufacturers. If they wanted to remain suppliers, they had to comply with the manufacturers’ demands, or risk losing them as customers.
Things are very different today. As big manufacturers offload responsibilities onto suppliers, those suppliers who have been able to adapt to the change have emerged as specialists in very specific markets. Taking their new responsibilities on board, these suppliers gained a competitive edge over those who failed to adapt and, in doing so, forced the big manufacturers to collaborate with them. The submissive relationship was over.
A healthy customer-supplier relationship was born. So much so that today, big manufacturers must woo suppliers in order to be the exclusive beneficiaries of their technological advances. In this new dynamic, what approach must manufacturers take? How do they make themselves more attractive to their strategic suppliers?
Tips for attracting strategic suppliers
First, make sure to carefully target the suppliers you are looking for. See that they are tuned in to the essence of your product and, above all, that they are in tune with your company’s vision, mission and values.
Next, establish a vision and a shared strategy to consolidate your retention of the supplier, clearly defining the relationship and level of transparency between you and your supplier. To make your customer-supplier relationship a success you must:
- Define your level of involvement with the supplier
- Be transparent, and have shared objectives
- Contribute to your supplier’s growth
- Keep communication channels open and facilitate dialogue
- Involve senior management
- Participate jointly in engineering and R&D activities
- Make use of your supplier’s skills
The benefits of being more attractive:
- Better collaboration resulting from greater transparency
- Improved production methods, and hence improved productivity
- Continuous improvement of the quality of your product
- A competitive advantage thanks to the supplier’s technological advances
- A reduction in rejects, meaning lower production costs
- Increased satisfaction among your customer base
These days, it is becoming more and more difficult to make direct savings on the cost of materials. Being creative and investing in a customer-supplier relationship that profits both parties in the long term will prove vital to your company’s success.
Today, purchasing professionals are looking increasingly to added value, innovation, risk management, and long-term supplier relationships rather than merely to cost reductions.
“Realize the impact your strategic suppliers can have on the success of your business!”
This short video clip (in French) is an example of a company that shares this philosophy.
What do you think? Does it represent your reality?