Tag Archives: supplier relationship management

Suppliers Want You to Be Their Customer of Choice

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Customer of ChoiceIs your company recognized by its suppliers as a Customer of Choice?  What exactly does this distinction mean and why is it important?  A Customer of Choice is a customer recognized by many of its suppliers as a preferred customer for a number of reasons.  From their talented workforce and integrated management systems to their global processes and approach to supplier collaboration, customers that can achieve this distinction can unlock new sources of competitive advantage with the help of their suppliers.

When suppliers recognize that they have a Customer of Choice on their hands, they have a tendency to go out of their way to service that particular customer’s needs.  In these situations, suppliers will assign their most talented employees, allocate scarce resources, provide additional discounts, prioritize production capacity, give early access to new products, and go out of their way to solve customer problems so that their customers can … Read more...

5 Reasons to Keep Suppliers & Buyers in the Loop

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charts_businessOrganizations love to make design changes to their products on a regular basis.  Any firm producing a product, be it the Tesla Model S or McDonald’s French fries, strives to introduce incremental improvements to add new features, reduce costs, comply with the latest regulations, and remain competitive.  Sometimes these changes have an impact on suppliers.

  • Tesla just released its Version 8 software that introduces over 200+ enhancements for the Model S Autopilot technology.  Some of these changes will have an impact on Tesla’s suppliers due to integration between purchased components and Tesla’s design.
  • In 2008, McDonald’s formally announced it changed its recipe for French Fries by changing to trans-fat-free oil to address general health concerns over cardiovascular disease. Imagine the impact of this change to the supplier providing the trans-fat oil from a capacity, inventory, and profit standpoint.

The impact that design changes have on suppliers is significant.  Let’s take … Read more...

3 Ways It Pays to Turn Suppliers Into Partners

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SuppliersHave you ever stopped to think about how important your suppliers are to your business? Do you view suppliers as business partners and an extension of your business, or do you see them as a reactive service provider that exists to fulfill demand?

All too often we tend to treat supplier relationships as contractual agreements rather than mutually beneficial partnerships. This behavior grossly under-estimates the tremendous benefit suppliers can provide to your firm’s day-to-day operations.  This “servant” paradigm is not the right way to go about conducting business with suppliers for a number of reasons.  Instead, let’s talk about three key reasons why we need a fundamental shift in our thinking away from the supplier “servant” paradigm to suppliers being members of a critical department in your organization – a key business function that adds value for your customers on a daily basis.

Reason # 1: Start with Trust

Relationships … Read more...