How to use suppliers to gain an edge over your competitors

Building a successful business relies on providing maximum value to customers and that is virtually impossible to do alone. Focusing on opportunities to collaborate with suppliers provides the basis for building successful, long lasting relationships while maximising business growth. Suppliers can become your secret competitive weapon, your hidden resource and your competitive edge. The Business Minder has found several successful ways to maximise supplier relationships for clients, through increased collaboration resulting in new market opportunities, increased profitability and sustained high quality.

Getting smarter

Take time to identify the key suppliers and trades that are integral to your success. You can't collaborate with every supplier and trade. Think about and discuss what areas you can engage with key suppliers on to develop new business or maximise existing opportunities. Smart business leaders use suppliers to maximise their own product competitiveness and look beyond the narrow focus of cost reduction. Leaders exceed traditional sourcing practices, adopt new models to fully leverage supplier capabilities, and further their own position in the marketplace.

Communication

Make sure that you are talking with your key suppliers. Decide what makes sense to communicate, how your key suppliers and trades might support you in achieving such, and then begin a dialogue. I guarantee you will be surprised as to how many suppliers provide new ideas and alternatives that you hadn’t considered before. Your suppliers can be an important source of information on ways that you can improve your performance and productivity.

It works both ways too. Suppliers receive some benefits in the emerging relationship. It helps to reduce their paperwork, lowers overheads and assists in faster payments. Long term agreements can lead to more accurate business forecasts, access to new designs, and your input in their product and marketing plans.

Better business

Partner with a supplier to identify new business opportunities so you can compliment each other’s strengths. Working together can help to increase productivity, maximise billable time, and develop new solutions to your customers’ most unique problems. These aspects can be further investigated as part of a supply chain agreement between you and a supplier.

Joint marketing promotions

Creating alliances and partnerships might seem like a big business concept. However, it could be something as straightforward as joining forces with your local spa to promote health products or linking together a store selling souvenirs with a tour operator. This is a unique opportunity to increase your advertising audience, enabling you to reach more customers with your marketing message. You might also combine assets and resources like employees, market research, databases and product or service lines. Joint marketing agreements do not carry large risk because both you and the supplier share in the success or failure of the marketing campaign so its in your mutual interest to both work hard to ensure the promotion succeeds.

Identify the decision maker

Discussions with senior supply management will be necessary to ensure that there is a clear understanding as to what's expected of the collaboration. For collaboration to be successful, those at the top have to open the door and seize the moment in order to create a shared vision. This is not something that can be delegated down. If you want to improve your supplier relationships to maximise value to your customers, make sure to start with discussions at the highest possible level to ensure outcomes and expectations are clear and agreed on.

Forming close relationships with your key suppliers provides the best opportunity to not only survive, but thrive in an increasingly competitive marketplace, where commodity and labour costs are conflicting with increasing customer demands. Thriving small and mid sized businesses that are already well established will be better able to take on leveraging than a new start up, but even new businesses should take the time to learn more about their suppliers than just looking at their prices. The Business Minder is a business management and consulting business analyst and operates in Singapore, Malaysia and Indonesia.