Acing the Supply Chain Through Active Assessment of Suppliers & Partners
A supplier is an entity or organization which provides goods or services for a specific period, which ends when the transaction ends. However, a partner is a tailored business relationship based on mutual trust, openness and a shared sense of risk and rewards that yield a competitive advantage.
Businesses often choose suppliers & partners predominantly based on cost and are not hesitant to change if they see another product or service at a better price, location, features, etc. However, it’s not in the company’s best interest as it leads to searching and arranging new contracts with the suppliers or partners, which results in additional cost.
Why Companies Seek Supplier & Partner Identification?
To run a business smoothly, companies seek longer and healthier partnerships with a small number of suppliers. It provides better value than regular throughput in contracts. Hence, most companies nowadays are looking for quality, reliability, value for money. Additionally, vital service and smooth and clear communication build a strong relationship with the suppliers & partners.
Building a strong relationship with the supplier or a partner is a two-way street. For instance, the company wants the assurance of knowing that their goods will arrive when they require them. The company also sees flexibility from the supplier end to accommodate a change in demand for goods with sufficient notice. On the other hand, suppliers also want a consistent flow of orders from its customers as it provides stability.
Key Benefits Offered by Supplier & Partner Identification?
In today’s highly competitive global environment, procurement or vendor management plays a fundamental role in any business as it is crucial for the business’s success.
The following are some of the key benefits associated with the supplier & partner identification for any business:
Mitigating Risk: It reduces the risk associated with unforeseen cost implications, operations, or regulatory compliance for increased visibility. Identifying the right suppliers & partners for business means tracking the suppliers and relevant information such as qualification, certification, past performance, and suppliers’ financials to get a broader picture of their risk level to protect your business.
Performance Optimization: The right supplier & partners associated with your business can help you ensure optimal performance by ensuring that the company meets your needs and requirements. The data received while tracking suppliers’ performance can reveal the various challenges that can be addressed before becoming troublesome.
Cost Reduction: Having a strong relationship with the supplier due to adequate procedures and processes, the company can reduce the overall cost by negotiating for better rates and having access to discounts and incentives, thus improving the overall profit margin of the business.
Ensuring Uninterrupted Supply: The presence of excellent suppliers in your value chain is a must. The company must build loyal relationships with them for the long term to ensure the business’s efficiency and smooth running.
Protects Brand Value: Identifying the right supplier & partner in your business will help save your company’s brand image. It holds much value as suppliers can help and provide their clients with relevant information on a supplier’s social and environmental standards, thus reducing the risk of a severe incident.
Potential Opportunities Offered by Supplier & Partner Identification?
Companies present in the industry ecosystem can upscale their business by improving operational efficiencies, reducing cost, and boosting their business’s profit margins, thus building a smooth value chain ecosystem with the right suppliers and partner’s involvement to meet their requirements.
Furthermore, companies can tie-up with suitable suppliers & partners, helping them access data on niche materials with higher demand potential.
The supplier & partner assessment helps the companies in crucial decision making. For instance, the company can plan a strategic move on geography expansion by understanding the supply potential in a particular geography or area with the right supplier or partner.