Suppliers are an inherent part of the Supply Chain and irrespective of the kind of business, the products made, distributed and sold, businesses cannot accomplish much without the collaboration with Suppliers and working with them is some sort of a formula to achieve value and an effective business model.
How do businesses ensure there is a healthy and productive engagement with Suppliers and not look at them as only sourcing partners? They should look at forums where suppliers could be invited and make them to hear about the current state of the business, explaining the objectives, defining the problem and challenge and specifically highlighting the amount of improvement needed. It is about spending time together and having a dialogue with the suppliers. Effectively, when there is an understanding of the problems and the objectives it equips them with the information, they need to figure out how they can help. Such an exercise gets suppliers to come up ideas on where they could help the business with its objectives.
From a supplier’s perspective, these forums are a welcome change given that most times their interaction with the customer is over a negotiating table , instead it is a case of communication and information sharing which makes them feel like they are part of the customer’s team and not just a third-party selling goods & services at arm’s length. In addition, a sense of belonging is created by the fact that the customer openly sharing the challenges and making them as an equal player. This collaborative approach gets them think and have a mind to reciprocate as against a negotiating approach which merely is transactional. Such a belief and comfort level would potentially lead to a friendly, professional conversation which could eventually be more inclusive and constructive.
In conclusion, collaboration has made businesses to look beyond the historically transactional nature of supplier relationships, where the suppliers are still expected to be competitive. However, the invitation to be part of the inner circle through collaboration has created the opportunity for suppliers to deliver results far beyond what could ever be achieved across a negotiating table, besides building a level of relationship and trust which enables mutual success.