Monday 16 June 2014

Maintaining Strong Relationship with Supplier, Striking the Best Price for Company !!

Authored by Usama Shahid

Supplier is a central point of procurement activities and processes. But, it is surprising how few organizations really think like that. Yet the performance of a supplier has a huge impact on an organization’s success and will ultimately determine how the procurement function and its leadership will be regarded by the business. Suppliers are more important than ever in today’s economically uncertain times – particularly when that business relies on its suppliers to bolster its own image, reputation and bottom line. A supplier’s price, quality, reliability, technology, and industry knowledge can offer a business an advantage over its competitors.

Procuring budgets are becoming ever tighter, businesses are being required to cut costs and look for the lowermost possible prices, leading to awkward conversations between businesses and their suppliers, and employing pressure on their relationship. Balance must be found if corporations are need to meet their business objectives while remaining on positive terms with their suppliers.

But, although businesses may, by necessity, become more demanding of their suppliers, they can avoid being perceived as difficult by ensuring transparency and reliability in their relationships.

A strong start is crucial in building up a new relationship that enables both supplier and purchaser to get the most out of their partnership. A level of transparency can be firmly established from the start by making all prospective suppliers aware what will be expected from them during the initial qualification and selection process, and beyond.

Once suppliers have met the purchasing company’s qualifying criteria, contract terms should be negotiated, including clearly stated expectations in terms of product, timeframe and price. A supplier is more likely to trust a customer that pays on time, this is the reality that supplier can work as your additional hand if you response fair to them they will always response you virtuous and favorable which ultimately drive to the cost savings.