5 steps to improve your relationship with your suppliers
Finding a good supplier is no easy task. Even if the choice was judicious and the first services had good results, the performance may drop over time. This may be because the relationship with suppliers is not being conducted in the best possible way.To ensure a lasting relationship with its suppliers, as well as maintaining quality standards, it is essential to pay attention to some critical points.
1. Respect the purchase order
If a delivery is disrupted by sudden changes to the order, it is not the supplier’s fault. This type of change can cause strain on the relationship, so leave changes to be made only in times of extreme need.
Check and review the order and delivery schedule as often as necessary, align all the points and try to stick to what was agreed. Follow each step of the process closely, showing concern but not distrust. Trust the work of the supplier you’ve chosen.
2. Encourage communication
It is important to establish a strong communication link with suppliers from day one. Define which channels they should contact you in case of problems, changes, unforeseen events, doubts, among others, and be attentive to respond to these requests.
In addition to keeping in touch with current suppliers to monitor the progress of orders, it’s also worth trying to stay on the radar of older ones, who don’t currently have active contracts. After all, you never know when you might need their services.
Share with your providers a little about your internal processes. You can invite them to get to know the operation up close on a visit to your company, for example. This way, they can adapt some steps of your process to facilitate integration with your operation.
3. Automate your processes
Automating processes means adopting tools that facilitate and optimize the organization and consultation of the most important data for each order, transforming them into predictive information capable of optimizing your processes and reducing costs.
4. Offer constant feedbacks
Conduct assessments and monitor your suppliers’ performance constantly, letting them know your reports and insights. This way, they can better understand what their experience was like as a customer and how they can improve service delivery.
Check out some criteria you need to follow and how best to assess each of them:
A very important quality criterion to keep track of is the quantity of items that are rejected in each delivery. This index says a lot about the supplier’s concern to ensure that deliveries are made in accordance with your purchase order.
To check this criterion, companies often measure quality in PPM, parts per million, by scaling how many PPMs were delivered damaged or rejected. The company must define an acceptable rate of quality problems for each type of delivery and use this standard to assess the performance of each supplier.
In addition to monitoring them, it is important to have these standards recorded and make them explicit at the time of hiring. Thus, it is clear that those who disrespect the quality standards can be penalized and even excluded from the list of service providers, depending on the extent of the situation.
Another group of criteria that must be evaluated are those related to the performance of deliveries. When closing a contract, the dates on which the products must be delivered are defined.
However, in general, companies establish a “standard deviation” from the exact agreed date, of about a day before and a day after, so that deliveries made on this margin are still considered correct. This deviation exists to anticipate possible complications in the delivery, which takes into account a margin of error for undelivered quantities, around 10% of the total order.
Keep a strict control of dates and quantities, safeguarding the acceptable margin of errors to absorb possible accidents, and assign grades to each supplier in these items. On a scale of 0 to 10, for example, a supplier would only score 10 if their deliveries perfectly matched the three requirements: deadline, conditions and adequate quantity.
Other evaluation criteria
It is also possible to assess the supplier’s performance through its posture in some negotiation fronts. Assess if it is open to reduce costs based on their proposals and make payment terms more flexible. This shows your desire to maintain a lasting relationship with your company.
5. Analyze the supplier performance
After evaluating the performance of your providers, assigning grades and making the necessary observations, it is important to analyze this data. For providers that provide the same type of service, it is even interesting to draw a comparison between assessments and observations.
For all of them, it is important to assess the feasibility of keeping them in the company’s framework. If any of them do not perform to expected standards, it is worth scheduling a meeting to review the terms of that partnership, and even consider canceling the contract.
These assessments are also a great way to analyze the functioning of the processes involved in your company’s supply management and find areas for improvement. In this way, the company gains not only by keeping the best suppliers, but also by constantly optimizing management processes and methods.
At Soluparts, we evaluate all our suppliers based on quality and performance criteria. Our evaluations and observations generate an internal ranking with the best suppliers in the international market. Thus, we are able to offer our customers a service with the highest quality! If you haven’t tried our services yet, request for quotation today!