How Organizations Can Build a Positive Relationship With the Suppliers

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HOW ORGANIZATIONS CAN BUILD A POSITIVE RELATIONSHIP WITH THEÂ SUPPLIERS Supplier Relationship Management

Presentation Overview

What is Supplier Relationship Management

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(SRM) Strategies for Building a Positive Relationship with the Suppliers

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What is Supplier Relationship Management (SRM) ?

In this age of cut-throat market competition, every organization is trying new methods to reach a wider audience.

Sourcing is a viable strategy for organizations as it enables them to lower their production costs. For long-term gains, companies need to build positive relationships with the suppliers.

Supplier relationship management (SRM) is a process of strategically managing all the interactions with all the suppliers the organization is dealing with to maximize the value and reduce risk of failure. The main goal of SRM is to improve business processes and relationship between the supplier and the organizations.

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STRATEGIES FOR BUILDING A POSITIVE RELATIONSHIP WITH THE SUPPLIERS

Suppliers are more than vendors

Many marketers tend to think that suppliers are just vendors. This is not the case. Organizations should consider suppliers as their partners and this relationship is more than financial transactions. It is grounded on trust and loyalty. Companies should try to make suppliers feel that they are a part of businesses.

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Detailed agreements If a company is buying something from a specific vendor regularly, the Supplier Relationship Agreement is mandatory. This will make both parties ensure the product description, service quality, price, delivery terms, payment terms, communications, etc.

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Assess the supplier risks

Marketers should assess the risks before dealing with a supplier. If a company has a complex supply chain, it is of utmost importance.

Marketers should ask suppliers about the experiences of their previous works, years of operation, areas of expertise, etc. In this way, organizations can get a fair idea about the supplier’s services. With the help of sourcing consultants, marketers can get in touch with the suppliers suited to their needs.

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Technology facilitates relationship management

With the advent of new technologies, business firms are trying to modify their operations.

Many modern-day companies invest in supplier management software as it helps them to keep track of the suppliers’ information.

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Timely payments Some small and medium-size firms give a blind eye to this fact. This should be avoided at all costs. A large number of organizations lose suppliers because of this reason.

Companies should inform suppliers if they are unable to make a payment on the due date.

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Strong and deep relationships

A large number of modern-day organizations hire supplier development freelancers to build strong and deep relationships with the suppliers. It is advisable to maintain strong and regular communication with the suppliers.

Marketers can keep suppliers regularly informed about their strategy and plans. This will prove to be a boon in the long-run.

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Implement a dedicated SRM process

According to research, employees and their soft skills are an integral part of SRM. When there is a need for managing vendor relationships, the role of a Supplier Relationship Manager comes to the forefront. It is important from the part of business firms to create a documented process that would cater to their objectives.

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