As per the recent industry trends, CPOs have shown more intent to direct more of their time and resources to Supplier Relationship Management (SRM) activity. The reason for this is that the CPOs have realized the fact that the most important cog in their wheel of procurement are the suppliers and that any process cannot work efficiently if the suppliers are not at par or in sync with the goals of the procurement department.
It’s very important that the supplier base is fully engaged with the procurement team and is constantly looking to develop and deliver new products to help the organization in increasing their market share in comparison to the competitors. At the same time, the supply base should also be involved in the discussions of improving the existing manufacturing processes, making them more efficient and delivering sustainable performance over a period of time at their end. In other words, they should be able to act like an extended arm of the procurement department of the company.
The various ways in which the procurement functions are trying to achieve this aim including the following:
Creating dedicated Supplier Websites
A user friendly and easy to understand website helps the company market its value proposition to its customers. At the same time it says a lot about the history of the company and the background.
Similarly creating a website that would be dedicated to the suppliers of the company would allow the company to set the right standards for the suppliers and also manage their expectations. This would keep the suppliers engaged and help them win more contracts if they know the demands of the client.
Having a transparent and open communication channel with the suppliers is the key to building a long-term relationship with them. In this regard, a dedicated website would go a long way in doing this and starting the relationship with the supplier on the right note. Also updating it regularly with all the latest information would help in keeping this relationship strong.
One of the most popular ways of engaging with the supplier and developing relationships with them is by having the designated supplier events. These events are usually held on an annual or semiannual basis where all the strategic suppliers of the company are invited. The discussions in these meets usually center on new product innovations as well as long term goals of the company. This helps in making the relationship very open and transparent as the suppliers are allowed to give their constructive feedback on how to make the system more robust and lucrative for all. The idea behind this exercise is to give the suppliers the feeling that they are an extremely valuable part of the procurement organization and that their feedback is invaluable to the company.
In a nutshell, having the right set of strategic suppliers is extremely critical to grow and develop the supply chain function of the company. Hence for an organization, it pays on a long-term basis to develop healthy and engaging relationships with these suppliers through websites, events or anything innovative. The key point to note here is that the suppliers should be kept engaged at all points of time.