Thursday, November 17, 2011

Building Good Supplier Relationships and Trust.

To building good supplier relationships with trust there are a number of things you should do.

1. Be predictable in your dealings. If you always respond to things the same way the other party knows what to be prepared for. If you are unpredictable they could be surprised. Good relationships have minimal surprises.

2. Communicate frequently. The more you communicate the fewer surprises you will have.

3. Tell them what you want. This is no different than what you do in preparing for the negotiation. People aren’t mind readers. If you tell them what you want that sets expectations that they can be prepared to respond to.

4. Tell them why you want or need it and expect the same from them. A supplier may deal with a number of different customers and what you want or need may be different. If they can understand why, they can help you.

5. Be factual. Forget the fancy presentations, smoke, mirrors and B.S. Keep meetings and calls brief and provide them with the facts and get facts from them.

6. Be accurate. One of the best was to ruin a good relationship is to be consistently inconsistent. Every time you are inaccurate in an order or forecasts that will impact the supplier.If they work to help you it’s probably impacting their relationship with another customer..

7. Provide reasons, explanations and legitimacy to back up what you want. Many times for a supplier to do something different for you, they need to go back to their own company and sell their management why they need to do it. Given them the help they need to make that internal sale.

8. When you have a problem, communicate and tell them about it. Many times perceptions of problems are simply misunderstandings. The other party can’t do anything to correct the problem if they don’t know about it.

9. Explain problems in a manner they can relate to. This ties back to #7. To explain it to their management they need to understand it and be able to communicate it in a way their management will understand.

10. Say what you’ll do and do what you say. Demand they do the same. Trust is earned and the easiest way to start to build that trust is to do this.

11. Don’t hide facts and expect the same from them. It normally won’t take long to discover all the facts and if the supplier knew that you only shared part of the story, they won’t trust what you say in the future as being the complete or accurate picture.

12. Be willing to say no when no is the right answer for both sides. When you simply can’t do something, say no and explain why. That makes sure that you both understood what you were saying no to. Many times a no exists because of a failure to communicate.

13. Work together when either side has a problem. If you help them when they have a problem you should expect them to help you when you have a problem. If you don’t, they won’t trust you to help them.

14. Expect to get what you give. If you operate under the “golden rule” where you have the money so you make the rules, be prepared for the supplier to have their “golden rule” where
I have the supply so I make the rules. Abuse when you have leverage doesn’t lead to trust.

15. Recognize good performance as much as you complain about bad performance. Suppliers love to get recognized for their performance. Sales people and internal sales people love to get recognized by their customers as one of their key measurements is customer satisfaction.
A simple “thank you” can do wonders.

16. Eliminate games by either side. Make sure everyone on your team is aware of the relationship that you have and they behave in a manner that supports that relationship.

17. Have an escalation path for disputes. Many relationship fall apart because the people who are in the day-to-day heat of the battle get into a dispute where neither side wants to give in because it will make them look bad or cause them to not meet their metrics. Escalations allow for people with a different set of goals and metrics to look at the bigger picture

18. When you are wrong admit it. Being wrong and not admitting to it may help your ego but it won’t build trusting relationships.

19. Always remember that both of you are in the relationship because you both have something to offer and you both want to benefit from the relationship. If the other party starts to head in the wrong direction make it clear that relationships need to provide benefits to both parties.

20. If they fail you in any way, let them know that future trust will need to be earned by performance. I think U.S. President Richard Nixon said “trust, but verify”. Once burned by a supplier that advice makes sense.


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