Towards stronger, better supplier relationships in 2022

In the world of Procurement, many things can be taken for granted. One such thing is your suppliers and their ability to provide as and when needed. Becoming complacent with these relationships is all too easy and costly. You not only miss out on opportunities but also risk major setbacks due to possible supplier disruptions.

The first step to building a resilient supply chain is strengthening your relationships with suppliers.

Why now, you may ask

The importance of good relationships with suppliers has never been more important than it is now. The slow supply chain recovery post-pandemic, along with increased volatility and disruptions due to factors like climate change — means key partnerships can make or break your business moving into the new year. According to Deloitte’s 2021 CPO survey, only 26% of leaders were able to confidently predict risks within their supplier base. In light of this, enterprise leaders must keep their eyes peeled for healthy vendor relationships that will last beyond 2022.

The era of the linear, traditional supply chain is long gone. We now need a unified, transparent, system that links all elements to create a singular, intelligent entity. In this blog, we will highlight some high-risk areas that need fixing and ways you can go about building better supplier relationships.

Some costly-to-ignore risk areas

Shaky vendor relationships can expose an organization to many challenges. Here we’ve listed some of the top ones:

• Reputational risk: Who your supplier is, the quality of their process, the final service/product delivered by them — any failings in any of these can damage your organization’s reputation. For instance, if a supplier is using unethical sourcing techniques, like employing children, it could speak to what you condone as an organization. This can lead to reduced sales, loss of customer goodwill, and even lost customers.
• Information security and privacy:Instances wherein sensitive data, either internal or customer data, is compromised by a cyber-security failure at the supplier’s end. For the customers, this would be a violation of the chain of trust, and for you, it could mean huge financial and reputational damage.
• Regulatory risk: The risk arising due to non-adherence to regulatory requirements as laid down by the jurisdictions within which you operate. This could mean legal as well as financial implications.
• Resilience risk:A circumstance wherein a failure or interruption at the supplier’s end may lead to an interruption in serving the end-customer. For instance, a supplier’s inability to come through with raw materials on the set date, due to local turbulence, may delay or hinder the delivery of your end-product.

The key to gaining a more comprehensive view of supplier risks is interconnected digital tools, physical infrastructure, and corresponding data streams. Robust and dependable data can help provide better supply chain visibility and help leaders identify potential weak links. With the resultant foresight, organizations can proactively respond to emerging threats in an effective, cost-friendly manner.

The first step towards proofing against any of the above risks is to build strong relationships with your suppliers. But what exactly is a strong supplier relationship? One that has all the ingredients of any other good relationship — transparency, communication, mutual trust, and reliability.

How can you build better supplier relationships in 2022?

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Read more her: https://www.zycus.com/blog/supplier-relationship-management/towards-stronger-better-supplier-relationships-in-2022.html