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Suppliers – Your Competitive Advantage?

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Edward Deeming, originator of the quality movement said that quality companies would treat suppliers as partners. The Body Shop had genuine partnership with its trucking company and even shared its profit with the company which resulted in exceptional performance and a reliable delivery service to their shops – a competitive advantage.

Many companies profess to treat their suppliers, consultants and contractors as partners but in reality, few do. Some organisations demand the most out of their supplier but pay as little as possible. Others insist they are ‘the Customer’ and require suppliers to meet strict demands or go to other providers if they don’t. Others behave in a dismissive way to suppliers and contractors.

Some companies, however, consider their suppliers, contractors and consultants as partners and treat them with respect and fairness. While this seems a logical way to work with suppliers, in my experience, it rarely happens, and yet it can provide a competitive advantage if a company treats its suppliers well.

Here is how to turn your provider relationships into a competitive advantage;

  • Keep to your word, appointments and timelines: Some companies provide little notice on changing their appointments and obligations. Remember, the time of your contractors and consultants is as valuable as your own. Expect suppliers to live up to their promises and also keep your own word and promises.
  • Live your Company values: Most organisations have values that they want all of their staff to work by. These usually include; integrity, respect, teamwork, care for the environment, and so on. Apply these values to your providers just as you would to your own staff. If an organisation was genuine with its values it would treat their suppliers in the same way as they treat their CEO and owners. Treat each supplier fairly when deciding on new work and aim to ensure all potential suppliers are offered the same opportunities as those you currently work with (and possibly favour).
  • Provide relevant, truthful feedback to suppliers: It costs a lot of time, effort and money to put in a proposal and suppliers don’t mind this if they can learn and improve their chances. Often organisations provide little more than a standard letter saying that your proposal was unsuccessful. Be open with your supplier, where possible, providing them with honest feedback. The same applies to a supplier who makes a mistake – help them improve by pointing out where they went wrong.
  • Pay suppliers on time: Some companies pay suppliers’ invoices very late. Suppliers work harder for companies that pay them on time.
  • Give Proper Time for Tenders and Proposal: Give adequate time for suppliers to respond to your requests. Also, ensure the right people are available to answer any questions.
  • Conduct a survey of your suppliers: Ask your providers to rate you on key factors like courtesy, payment, clarity of requests, fairness in selection of contracts, knowledge of their business, integrity, etc. You might be surprised by the results; your suppliers are probably already telling people about how your organisation is to deal with, so you might as well learn firsthand.

 

Companies may not be ready to replace the saying; “Our Customers Come First” with “Our Suppliers Come First’. ‘Suppliers are Our Partners”, however, might be a useful first step on the road to achieving competitive advantage through outstanding supplier relationships.

ENDS…

Ron Cacioppe

Ron Cacioppe is the Managing Director of Integral Development and holds a BSc, an MBA and a PhD. He has taught in the Graduate School of Management at Macquarie University, Curtin University and the University of Western Australia.

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