Building Effective Relationships with Suppliers – “The Relationship Management Maze”

Once upon a time, Relationship Management was a bit of a black-art, especially when dealing with suppliers. Improving joint performance and relationships with suppliers was dependent upon having the right people with the right behaviours and attitudes in place who just seemed to know how to do it. Not so anymore. In fact we seem to have swung to the other extreme where there is a plethora of tools, processes, standards, frameworks – sometimes complementary but often overlapping – which are designed to provide some structure in place of magic. These include:

  • The Aerospace, Defence and Security industry SC21 programme
  • SCRIA – Supply Chain Relationships in Action process
  • The BS11000 standard for Collaborative Working
  • Prime Contractor supplier development programmes
  • Strategic Supply Chain Management processes
  • Supplier Excellence programmes
  • Balanced scorecards

So now we have many ways to skin the cat – how do we decide what’s best?

Some of the list above are tools, some processes, some standards, some approaches. The question is, what are the key principles we need to incorporate in any supplier relationship management approach? Consider the following:

  1. Appropriate – don’t treat all suppliers the same, some type of relationship segmentation is needed;
  2. Joint objectives and strategy – what I/you want and why, what we want together, how we’re going to get it;
  3. A relationship review processincluding
    1. A diagnostic approach (including a tool)
    2. An issue resolution process
    3. The fact that you do it is an order of magnitude more important than what you measure – don’t get lost in the detail of the measures;
  4. A joint improvement plan – combine it with the strategy, call it an RMP if you like – including how we’re going to manage the relationship, the “governance”;
  5. The right capabilities – to exhibit and embed to the right approach and behaviours
  6. Consistency – We all do it, and we do it all the time.

Follow these principles and it will help with the choice of the right tools, but above all, it will drive the engagement with suppliers that will facilitate improved relationships and ultimately improved performance.