Effective supply chain management is the backbone of a business but for many companies, it is also a challenge. A typical supply chain involves several entities – buyers, suppliers, distributors, and in the end, customers. Developing long-term relationships at each of these levels is the key to success.
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Why Strategic Partnerships?
Communication is vital to supply chain management, both internally and externally. External communication, however, has the biggest impact on costs, quality, and long-term success. It takes time to build strong relationships with every key player in the supply chain, but SCM professionals should always be working toward developing partnerships and not a surface-level connection.
In a strategic partnership, members of the supply chain work together to:
- Receive the best quality at the best value
- Define and meet the needs of the end-user
- Develop and improve products
- Set long-term goals
- Implement creative marketing and branding campaigns
Establishing Trust and Building Rapport
Any successful long-term relationship requires mutual trust and respect. This is just as true for business relationships as it is for personal interactions. What many people don’t realize is that body language impacts our interactions with others more than the words we say and how we say them. Whether you’re working with customers, distributors, or your internal sales team, you can build rapport and earn their trust by considering the following:
- Always make eye contact but don’t force it
- Carry yourself confidently and practice good posture
- Use open gestures when you speak with your hands or arms
- Don’t move away from your audience – lean forward or move closer to convey compassion
- Reflect the tone and actions of the people you are speaking to
Develop a Mutually Beneficial Partnership
It’s important to build an open, trusting relationship with every member of your supply chain, but strategic partnerships are best suited for the entities that play a major role in the life cycle of your product or service. Strengthening your relationship with these key players requires consistent communication, well-defined expectations, and cooperation between both parties.
A strategic partnership indirectly benefits the entire supply chain and ultimately benefits the customer. Depending on a company’s size and industry, they may have one or two strategic partnerships or they could have hundreds. The functions and goals of each relationship depends on the entities involved.
The end users of a product or service are the most important members of the supply chain. Developing a strong relationship at this level lets a business understand their customers so they can better meed their needs. This information is useful throughout supply chain operations.
Depending on the industry, a company may work with a single supplier or with many. If the products or services you’re procuring directly impact your end-user, a strategic buyer-supplier relationship is important. Businesses who work closely with their suppliers typically find the best value and can improve the products delivered to their consumers.
From transportation to warehousing, those who work at the distribution level of the supply chain are responsible for moving the product to the end-user. At this level, partnerships make inventory and cost management more efficient.
Strategic partnerships are the best way to run a smooth and efficient supply chain that provides the customer with exactly what they need. Outsourcing all or part of supply chain management is becoming a popular option because many SCM firms already have strong relationships with the key players your business needs to succeed. Whether you outsource or manage your supply chain in-house, communication is the priority.