Your First Supplier Engagement Initiative

I won’t ask whether or not your business practices Supplier Engagement, because every business does to some extent. The real question is: How good is your Supplier Engagement?

This is really important, because poor Supplier Engagement leads to all sorts of problems.

Building good Supplier Engagement, on the other hand, leads to greater efficiency and effectiveness in all sorts of areas of your business. In other words, Engaged Suppliers deliver more value for you, more quickly. Just as importantly, when you build a good working relationship with the people in your supply base, life gets better for them too. Win-win!

So, what are you going to do about it?

In order to improve the quality of your supplier relationships – to increase your suppliers’ loyalty to your brand and their effectiveness in what they do for you – you will probably need to make some changes in the way you work: communicate more effectively, provide better supplier support, and be more transparent. Beyond that, however, each such initiative is different. What you do depends on what you need.

That means it’s up to you to decide what you need, and also to measure the results – because it would be a very strange boss that wouldn’t want to know what return you’re getting for your investment of time, effort and resource.

What Do You Need?

Broadly speaking, there are three things you might want to achieve through improving your company’s Supplier Engagement.

  • Deliver specific business objectives:
    Whether you’re introducing a new system, rolling out a new policy, or trying to improve response times to your requests, you can focus your Supplier Engagement activities around a particular goal to make it happen faster and more cost-effectively.
  • Maintain the quality of day-to-day interactions with Suppliers:
    Already have a good back-and-forth with your suppliers? Great! Make sure you maintain the quality of these relationships by keeping the lines of communication wide open, showing how much you value your suppliers’ partnership and giving them all the tools and knowledge they need.
  • Increase the overall value that Suppliers bring to your Brand and Products:
    Once you have achieved a good level of Supplier Engagement, you can take things to the next stage, further improving suppliers’ efficiency and effectiveness, and tapping into their ideas and expertise to deliver an even better experience for your customers.

Better Supplier Engagement can improve absolutely any activity involving your suppliers. And it makes life better for your suppliers as well. So ask yourself what you want to achieve, then go for it.

Measuring Success

Set yourself some realistic goals and expectations, then compare the actual results of your activity to show just how worthwhile it is to invest in building Supplier Engagement. Share the results with your suppliers, too, so that they can see clearly how well they have performed. Exactly how you measure the success of your Supplier Engagement project or initiative will depend on your objective, but here are a few basic things you may want to report on for each type of project:

  • Deliver specific business objectives:
    of delivery, Cost of delivery and Supplier Participation Levels with reduced internal resource.
  • Maintain the quality of day-to-day interactions with Suppliers:
    Response time
    for requests for information, Number of supplier queries and Completeness of your Supplier contact database - Again, all with reduced cost and reduced resource. In other words, you can do much more with much less.
  • Increase the overall value that Suppliers bring to your Brand and Products:
    Right-first-time measures (e.g. the number of specification iterations or artwork re-works required), Accuracy, and Supplier Participation in surveys and initiatives.

If you would like to read more about measuring success, How to Calculate your Return on Investment for Supplier Engagement, should have everything you need.

Get Started

Once you’ve picked your focus and decided how you’ll measure success, it’s time consider the tools you need. Think about how you’re going to go about implementing the three key principles of Supplier Engagement in your context:

  • Communication
    Get yourself a robust communications platform and, if necessary, some extra help to get your messages right. You need to be able to send relevant, clear communications to a wide audience. It’s really important that right messages get through to the right people, and that you don’t bother the wrong people with irrelevant information. Trust me, if you get your communications right, you will save a lot more than you spend.
  • Support
    Your suppliers need access to help and information 24/7. The best and most cost-effective way to do this, I have found, is to invest in an online portal or knowledgebase – a secure, searchable repository of relevant information for suppliers. This has the added advantage of reducing your workload and saving on internal resource by answering questions that would otherwise have caused suppliers to pick up the phone to you.
  • Transparency
    Nothing promotes transparency and builds motivation quite like the ability to see at-a-glance how you are performing against expectations. So I recommend using online dashboards to display suppliers’ progress and performance.

S4RB’s team of Engagement Consultants can help you create and implement a Supplier Engagement strategy that empowers your business to do much more with much less. We offer a comprehensive range of cloud software and professional services to support our expert advice, ranging from a little extra help as and when you need it, to completely outsourced solutions.

Tags: Supplier engagement

Team S4RB

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