Supplier relationship management plays an integral role when you want to import products from China. It is essential to value the supplier’s relationship and make efficient dealings with them. Having a stable relationship with suppliers will surely end up boosting your business.
Your relationship with the supplier should be open enough to manage the supply chain department effectively. Knowing more about SRM can help your business grow and have a better relationship with suppliers.
Table of Contents
Chapter 1: Why Supplier Relationship Management is Important?
The Supplier relationship management definition is quite straightforward. It is the process of managing the suppliers so that they perform well. The SRM also involves measuring and monitoring supplier’s performance.
It helps to find the value provided by each supplier for your business growth. SRM is the best way to find the right supplier based on their performance. It promotes a better relationship with the supplier. If you have good relationships with the suppliers in China, this will help you get a lot of benefits which we talk about later in the blog.
The SRM is similar to CRM, which is customer relationship management. The only difference is that in SRM, you have to deal with the supplier, while CRM involves dealing with the customer.
Supply Chain professionals use the SRM for operations, project management, and procurement. The SRM helps in business improvement. Each organization uses a different approach to SRM, but their prime goal is the same.
Chapter 2: What is Supplier Relationship Management Based on?
Building a strong relationship with your supplier will help you a lot in your business. Working with the supplier is not only about signing a contract and waiting for the work to be done.
Supplier management is just like people management. Good supplier management can help in building a strong relationship. Businesses need to learn the art to interact with the supplier so that they perform well.
A better supplier can also help a lot in supply chain management. Following are a few important factors on which the SRM depends. These factors are the foundations to begin a better relationship with suppliers.
1. Open Discussion
Lack of communication is the prime cause of misunderstandings in many businesses. A supplier cannot read your mind, so you should tell them everything you want.
If you are clear with your outlines, it will become easier for you to achieve the desired outcome. The suppliers are like your business partners, so you need open two-way communication with them.
Discuss with the supplier what you want. Communication will help you learn more about your supplier. You will know whether the supplier is worthy of dealing with or not.
This open discussion will result in a long-term relationship. Make sure to develop a mutually beneficial arrangement, which will benefit you as well as your supplier.
If you want to become successful, you need to respect the other party. Make sure that it is a mutual appreciation. Suppliers usually want to work with those buyers who respect and value their work.
Respecting your supplier will also build trust, resulting in better performance from the supplier side. Both parties need to put some contribution to this matter. Respect and trust will further enhance the possibilities.
The fairness factor is another essential factor in supplier management. Both parties need to be fair with each other as per the contract. Suppose the supplier is unhappy with the way they are being treated.
In that case, you should clear the supplier’s concerns for a better outcome. If the buyer feels some issues, try discussing it with the supplier according to the agreement. Communicating with the supplier will help you solve many concerns.
If the problem is not solved from the supplier side, the buyer may resent the deal and start looking for a better option. Ensure that you and your supplier; both are treating each other with fairness.
Communication, respect, and fairness will help build trust. Trust accommodates in developing and maintaining a long-term relationship.
A buyer’s prime goal should be to create a long-lasting relationship with the best supplier, which can only be possible because of trust. A trusted bond will help both the buyer and the supplier to achieve their desired goals together.
In supplier relationship management, buyers need to show some flexibility. Both buyer and supplier can make a relationship successful by changing their way of working as per the requirement to help the other party achieve goals. A healthy relationship takes time and effort from both sides.
Chapter 3: Why Should You Focus on Supplier Relationship Management?
SRM is crucial because it can help you identify the supplier’s performance and build a trusted relationship. Supply relationship management should be your prime focus as it can play an essential role in your business’s growth.
A better supplier will produce quality products for your business as per the customer’s demand. You will further learn to align your business with your suppliers by using different strategies and techniques through the SRM. It will make you know what is right for your business.
1. Cost Negotiation
Most businesses spend more money on suppliers than on any other thing. To reduce your spending, make sure to work on your cost negotiation skills. Supply relationship management enables us to find the right supplier at the best rate.
A better relationship with the supplier helps to minimize the cost. Ensure that the lower price is not comparing the quality of your product. Different suppliers also come with attractive deals and discounts.
If you think it is suitable for your business, you can avail those deals and discounts. Low prices and better-quality products can help you make more profit.
2. Boost Efficiency
The SRM can also increase the supplier’s productivity, which is essential in the current competitive marketplaces. With SRM, you can also minimize the risk of errors and improve the performance of your supplier.
The higher the efficiency is, the more it is suitable for your business. Therefore, you should also focus on your business’s efficiency and eliminate all the factors that are causing unproductivity.
3. Long-Lasting Relationship
Finding the right supplier is not difficult, but maintaining them for a more extended period requires effort. Once you have located a trusted supplier, you will never want to lose them because searching for a new quality supplier is challenging and time-consuming.
The SRM can help you in this matter. It will let you manage and strengthen your relationship so that your suppliers work on a long-term basis. By offering better rates and respectful dealing, you can keep the suppliers happy.
You should know that suppliers have a crucial role in your business. If your suppliers are happy and they are delivering the quality product, your business will surely grow. Think of them as allies that can have a significant impact so you can build a long-lasting relationship.
4. Problem Resolution
Good supplier relationship management makes it easier to deal with problems between the buyer and the supplier. Whether it is the availability problem, delays, or quality issues, you can overcome them through SRM.
Communicate all the issues with your supplier and try to sort the concerns as soon as possible. A good SRM matters because it helps in developing a trusted long-term relationship.
Accept suppliers as critical strategic partners that can add a lot of value to your business. Buyers and the supplier should know each other’s needs and concerns and try solving them.
This problem-solving behavior will be beneficial for both the supplier and the buyer. It will surely increase efficiency and profitability.
Chapter 4: The Tactics You Should Follow for Better Supplier Relationship Management
If you want to improve supplier relationships, there are a few simple tactics you should follow. Not only will it improve your relationship with the supplier, but also it will enhance your business growth.
1. Know the Value of Supply Chain
The supply chain will serve you to get the desired product. It has a series of steps that you should focus on to attain a high-quality product from the supplier. Understand the value and co