Supplier Relationships
Why Are Supplier Relationships Crucial In Procurement?
By | E-Procurement Software
Eyvo stresses on the importance of Supplier Relationships and why they are crucial
By Bhargavi Nake

At Eyvo, we have spoken multiple times about how managing supplier relationships is a crucial aspect in the procurement cycle.

Keeping a close relationship with your suppliers is a must in procurement. No matter how close and trustworthy the relationship, it is a commercial relationship with both parties under obligation to hold up their end.

At times, the closest of relationships can also fall out of place or can lead either of the parties to follow different agendas from what was earlier agreed upon. Therefore, managing these relationships effectively is necessary.

How to do that ? Let’s have a look at just 2 key factors how supplier relationships can be managed effectively.

Mutual understanding between both parties The existence of the relationship needs to be defined with factors such as what both parties do or their line of business, how they do it, what is acceptable and what does not constitute a relationship. If the relationship between both the parties is old, there are usually boundaries in terms of what either of them avoid doing, mutual respect, other expectations they might have from each other in terms of operations, etc. Mostly, these things remain unsaid but the parties involved in this relationship know what to expect from each other. With respect to the supplier, we need to know what we want from them and then make sure that it is actualized.

Ensuring suppliers are on the same page as us The key to manage our relationships with suppliers is ensuring that the nature and extent of all relationships operate with a common purpose. It is also important that we understand their role too and support this. It is imperative for us to understand that even if we think a particular supplier is important to us, not every client of the supplier is of similar interest to them. They will obviously focus their resources on the client that is the most profitable to them. If such suppliers do not see us getting into a strategic relationship with them, we need to understand this and let go of them. This is why it is important for us to keep a track of our suppliers through reporting and analytics functions and we need to make sure we deal only with the best, based on trends. Finally, once we have defined our relationship with our suppliers and are sure of them, we must ensure we stay in control of it.

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