How will supplier relationship management help you achieve better procurement outcomes for your school? Independent procurement consultant Naomi Clews, of Naomi Clews Consultancy, discusses the benefits of building progressive, professional and productive relationships with your suppliers
Establishing a mutually valued relationship with your key suppliers often results in long-term cost savings, improved availability and consistency in the supply of goods.
Supplier relationship management (SRM) is more than just managing spend and finding the best possible deal. SRM involves the cultivation of meaningful relationships with your suppliers to deliver big savings and opportunities.
You can implement SRM within your school by:
- Prioritising the supplier relationship – suppliers are your hidden growth assets, so build the relationship with your suppliers in the same way that you would build relationships with your stakeholders (teachers, pupils, governors etc). Your best suppliers will help you determine the health and growth potential of your school.
- Focusing on the supplier relationship – with increased communication, you increase your importance to suppliers. Once suppliers know you are open to a conversation, and investing in joint problem-solving, they will be keen to work with, and discuss, opportunities for savings and efficiency gains.
- Strategising the supplier relationship – every school is dependent on their suppliers and, therefore, supplier relationships should form a major part of every calculated business strategy. Reliable suppliers help schools to thrive and succeed. Make sure you are getting the very best out of your suppliers by continuously reviewing and accessing their service, price and terms. This can be achieved through regular contract review meetings and the use of key performance indicators (KPIs) to monitor and measure performance.
- Managing the supplier relationship – manage your key suppliers as if they were your business partners. Deciding to align your organisation with your key suppliers can be mutually beneficial and often means that you achieve greater value over other schools. This may be achieved through increased quality and reliability and reduced costs and risk which flows from being a preferred customer of your suppliers.
What do suppliers expect from their customers?
Supplier and customer relationships should be mutually beneficial. In order to maintain your cohesive working relationship with your key suppliers, the relationship should always be equally valuable to both parties. You can achieve this in four steps by:
- Always paying on time – treat your suppliers fairly, as you would expect to be treated yourself. As a benefit, timely payers can often secure longer credit payment terms. If a payment will be slightly delayed, ensure that your supplier knows in ample time. Your suppliers can only operate successfully if you respect their payment terms of service.
- Providing adequate lead time – don’t expect suppliers to anticipate your needs; tell them what you expect and your accepted standards. Provide clear estimates and goals to help your supplier to plan. Avoid constantly changing or rushing your deadlines as this can create a strain in your relationship with the supplier.
- Communicating effectively – good business relationships rely on strong, two-way conversations. Suppliers are a brilliant source of information and advice, and can become advocates for your organisation, so share information about your business strategies with them.
- Building trust – personalise the supplier/customer relationship by inviting suppliers to your organisation; make face-to-face contact, and network with them and their representatives, as often as possible to maintain positive relationships. Having a closer relationship with your suppliers makes it more likely that they will look after your custom, rather than being customers they only know by their customer account number.