On St Valentine's Day, when we exchange cards, flowers and chocolates with our loved ones, it is sometimes hard for some to fall hopelessly in love with suppliers and contractors!
Love-drunk businesses may be tempted to enter into untested supply relationships, or forego the continuous compliance assessment of a ‘loyal’ supplier. It's important not to get carried away and let the head rule the heart. We all know how quickly ‘Love is in the air’ can turn into a twisted take on a Marvin Gaye classic; ‘I heard it through the supply-chain’.
Just as in traditional marriage match making, the formula for a successful supplier relationship relies on thorough vetting. We examine the four key elements to check when assessing the long-term suitability of your supply-chain partner and improve supplier relationships.
In sickness and in health
Our base instinct for forming relationships is to seek a mutual sense of safety and security. Similarly, we enter into business relationships looking for a more secure market position. Businesses want to feel safe in the knowledge that they will not be exposed to danger by supply partners.
This ‘danger’ can come in lots of forms, but one of the key concerns is the chaos that can result from poor health and safety practices. Businesses that either do not have, or do not follow entrenched health and safety procedures risk compromising their own wellbeing, as well as the wellbeing of their client.
For richer, for poorer
Financial hardship can be a serious strain on otherwise happy unions. In the same way, a business’s financial insolvency can have serious repercussions for an otherwise healthy supply chain. It is crucial that businesses use a proper methodology to initially assess, and then continuously monitor the financial health of all supply partners. Doing business with a ‘cash-sick’ supplier will result in a very messy divorce.
Love is blind
Supply chain blindness is just as prevalent as the blurry vision of young love. This is why an effective supplier information system is so important and liberating to those businesses seeking visibility and openness in relationships.
Rather than being bogged down in the day-to-day tedium of managing a clunky supply chain compliance process, managers gain a new freedom and find they can focus on adding value and taking things to the next level.
Sharing and caring
Once a common commitment to managing risks has been established and a financial safety net has been drawn underneath your relationship, you can begin to assess deeper measures of business compatibility – measures based on a commonly held set of values. If your business commits itself to providing good customer service, quality management and generating a positive social impact, you might expect the same of your supply partners.
Sharing these three core values is crucial to generate meaningful compatibility. Businesses with a shared ethos can expect to enjoy a long and healthy relationship – one that will continue long after the kids move out!.
Mitigate risk in your supply chain
Both new and existing suppliers pose a risk to your company and your supply chain, but using compliance can help to create a more reliable and better performing relationship. Download our free best practice guide to supply chain compliance and discover how to:
- Better assess the capability of new suppliers
- Improve your management of suppliers to mitigate risk
- Implement KPIs to improve supplier performance
- Learn best practice top tips to ensure supply chain integrity
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