Supplier Partnerships Can Fuel Innovation
In business, we tend to place a lot of emphasis on developing customer relationships and sometimes neglect the tremendous opportunities available to develop true partnerships with our suppliers. How can we capitalize off this low hanging fruit to help fuel innovation in our products and services? Below are a few areas to explore :
1. Supplier Evaluation
A pipeline of innovative concepts, ideas, or designs within an organization can often influence purchasing decisions to source new suppliers. Whether a potential supplier is supplying a product or service, deciding to onboard a new supplier can be one of the largest risks a business can take which can impact your creative efforts of differentiating you from your competitors. Knowing how to managing this risk is imperative. From a quality standpoint, you want to ensure that the supplier can deliver product on time and defect free. An effective quality system at the supplier can give you that "warm and fuzzy" feeling that this supplier is up to snuff. How is this supplier being managed internally? How does this supplier handle customer complaints ? Is there a corrective action system in place? Key suppliers who have implemented a quality system will send you a quality manual, if you request it, but you really need boots on the ground (2nd party audit) to ensure the effectiveness of the quality system and whether it's capable of meeting your requirements as the customer before deciding on doing business.
2. Supplier Performance
Let's face it, a supplier's performance should be monitored once you've decided to play ball. Coming up with criteria to track a supplier's performance is necessary for keeping problematic issues from adversely effecting the flow of materials, information, or services within the supply chain. In fact, not reacting timely to poor performance is risky behavior that can cause your customers to shop elsewhere thwarting your innovative efforts. The key is to monitor issues and communicate them from the very start of your budding partnership before they become a recurring problem effecting production, or worse, your customer. Are your suppliers meeting your expectations? Are you informing your supplier of performance issues about product defects in a timely manner? Are you providing a mentoring experience for those suppliers who may need improvement plans to correct poor performance? Are you sharing best practices for continuous improvement?
3. Mutual Collaboration
Establishing trust becomes a huge factor when trying to facilitate a mutual collaboration with your suppliers. Joint decision making plays a major role in your collaborative efforts as well. Frequent face-to-face interactions is ideal when trying to build trust over time especially when sharing knowledge. Relationships, in general, need to be nurtured and this takes quite a bit of time and effort which should be taken into consideration. Two way communication in the form of active listening is essential. There is much to be gained from sharing knowledge and providing timely feedback to your suppliers as it pertains to the quality products or services purchased. A commitment to on going communication about performance, technology, future offerings, etc. is key to building a partnership that is mutually beneficial and long lasting. Think of it as feeding a healthy marriage!
The key take away is to shift your thinking and partner with your suppliers, don't just buy from them. Price should not be your only motivator. Do they harness learning possibilities and share knowledge which can fuel future innovation within your business? Are you placing adequate resources into thoroughly evaluating new prospects? Are you monitoring performance and providing ongoing feedback? Does this supplier bring value? Building powerful partnerships with your suppliers sets the stage for innovation, growth, and profitability!
Can you think of other opportunities to develop supplier partnerships?