Maintaining Effective Vendor Relationships
When your supplier and vendor relationships start to move forward, you can expect some initial period of adjustment as your teams begin to work together.
Regardless of whom you assign to manage day-to-day relationships with vendors, it’s a good idea to maintain a high level of contact between you and the vendor’s management team. Very often, they can become key partners to help save you money. For example, vendors can manage your inventory and accelerate delivery schedules as needed.
Price will certainly be an issue that comes up from time to time, but remember that for a successful relationship to thrive, both you and your vendors need to be in a position to each make a reasonable profit.
Look to Vendors for Strategic Guidance
Many strategically oriented suppliers can help you streamline your business in other ways—if you keep them informed of your needs.
If a vendor knows that you’ll soon be launching a new product, making changes to existing products, or selling a different line of goods, they can start preparing to meet your needs. They may even be able to share their expertise through suggestions about improving your product line and lowering your costs.
Although you should consistently be placing small orders with alternative vendors from time to time to maintain relationships with those firms, you’ll want to maintain excellent relationships with your main vendors. In some cases vendors can even help you automate the process of managing your inventory.
For example, Vendor Managed Inventory (VMI) is a method where vendors receive electronically transmitted information about your inventory to automatically determine when you’ll need a shipment.
In this way, you can manage your inventory to peak efficiency. You’ll avoid tying up too much capital in inventory, while assuring you have adequate supplies to meet your needs. This can help you avoid the paperwork of complex purchase orders and perhaps even save on warehouse space.
Stay on Top of Relationships
Of course, you can run into issues when working with vendors. If they take your business for granted, you may receive a declining level of service and support. If you’re dissatisfied, contact your vendor’s senior account management team to discuss any issues. If you don’t get satisfactory answers, that may be a sign that you need to contact your alternative vendors and see if they can satisfy your needs for larger orders.
It may be the case, however, that your team isn’t managing the vendor relationship effectively. If so, you may need to make some changes in your own internal organization to preserve mutually profitable and valuable vendor relationships.