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Should Vendors be Suppliers or Partners?

Updated: Aug 27

By Dave McGuire, Editor CU


(CU) - Placing all your supply needs into one vendor is rarely a good idea. If a given vendor has a mechanical failing, fire or a strike is declared, you are left in a position of your business suffering as well. A good rule of thumb is always maintaining backup vendor information and not hesitating to let your vendors know you are prepared. They will appreciate your planning and openness in the event of a potential service disruption. In the same way as other relationships, vendor relationships are built upon trust, respect, and ongoing communication. From the start, vendors should be given pertinent information and clear expectations relating to services and purchase levels. Educating the vendor on your business needs and goals will provide critical insight into your business' ongoing objectives. These steps build towards developing a strong partnership that allows you to focus on core business competencies – which is the goal. Reliable vendors desperately want to build strong partnerships to merge your needs into their solid business plan. When your supply needs to align with vendor performance, your partnership will be successful. When they do not, you will need to either focus on realigning them or choose a new partner.


During the onboarding process, look for opportunities to include vendors in meetings with yourself and the affected department heads. Internal departments can absorb portions of the workload by assisting vendors with becoming more familiar with the functions of your business. Often those knowledge transfer require reasonable access to all your department heads who will be involved in a vendor's services. Through effective communication, your suppliers can gain a clearer understanding of how your business operates. The "what" can be observed easily; knowledge of the "how" is less apparent and can be obtained only through a vendor's integration with an association staff. Trust a vendor's advice and judgment on what they know best in their business. If you cannot trust a vendor, find a new vendor.


While it is the vendor's responsibility to become familiar with your needs and goals, your business should make the effort to understand the internal workflows of the vendor. Being familiar with the full range of your vendor's services is extremely beneficial to short-term requests, increases in inventory levels or short-term changes. It pays to know what your vendor has in his or her arsenal.


How often do you speak with your primary vendors? We should stay in regular contact and find a reason to touch base. Open communication between yourself and a vendor will lead to dialogue, which leads to the building of a relationship that enables you to consult with that vendor as a knowledgeable advisor. We all work hard to maximize our internal resources. When was the last time you added staff without major justifications? Vendors can be assets by relying on their experiences to guide your business in making informed decisions. The positive effects of treating vendors with respect for their knowledge and skill will show in the value they bring to your business.


Vendors are no different than any of us; Their motivation for excellence is increased when they feel they are treated with respect, as equals rather than subordinates. Of course, as the cliché goes, trust and respect should be earned. By the time you start working with your vendor, a mutual trust should be well established through preliminary meetings and reviews of the vendor's previous work. The saying "a friend of a friend is a friend of mine" is something to be considered. Vendors who have earned the trust of peers whom you respect are likely deserving of your trust as well. It is always a good idea to first consider colleagues for recommendations of successful vendors.


Your approach to vendors should be part of a strategic plan:

- Do not hesitate to be a demanding customer if you are being reasonable with your requests

- Clearly outline your timelines, quality needs, and expectations

- Hold your vendors to their agreements

- Be certain to remain competitive and let them know you never expect to pay higher prices than other customers


Along the way, continue to let the vendor know of your business growth and/or declining cycles. Remember they are managing internal par levels to balance your business needs. If you catch them off guard with an unexpected volume, it can harm the vendor. Conversely, there will be times when you will need to replace a supplier because you have outgrown them, and they cannot meet your new expectations. Before the abrupt move to drop them, you might try to help them change to keep up with you. Throughout a partnership, there are significant investments of time, resources and learning curves that need to be considered. If a vendor save is practical, it may be worth your efforts to investigate further.


Developing good relationships with suppliers is not a complicated process. Be communicative, tell them of your needs and standards, treat them fairly, be demanding, be loyal and pay them on time. It is as complicated and easy as that...

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