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Building Win-Win Buyer/Supplier Relationships

Building Win-Win Buyer/Supplier Relationships

Relationships can be complicated. As in personal relationships so is in procurement.  When things go sideways, someone always ends up on with the short end of the stick.

But it doesn’t need to be that way.

Building win-win buyer/supplier relationships is not a trick with mirrors.  It’s about applying the same respect and reciprocal impulse to the supply chain that exists in any healthy relationship, personal or otherwise.

And that’s not exactly easy.  We’re not going to kid you. It’s a project.  But it’s a project with benefits which only become more apparent as the relationship gracefully ages into mutually beneficial satisfaction.

The four attributes

A study conducted by researchers at the Rutgers Business School examined buyer/supplier relationships in the US car industry over a 20-year period.  

Focusing on the suppliers’ perspective, researchers examined data from instances in which buyers were engaged in product development with suppliers – instances which present the greatest potential for conflict.  

Arising from that data were four interconnected attributes which define the subject of our post – win-win buyer/supplier relationships.  And again, they’re precisely what’s required to establish any healthy relationship.

Communication

When humans gained the powers of speech, we also gained the ability to collaborate effectively.  Communication is at the heart of any human interaction. But it can fall apart if people aren’t clear that they’re working toward a common goal.

Openness and clarity were deemed by suppliers in the Rutgers study to reinforce more effective relationships, especially where innovative collaboration is concerned.

Sharing plans with suppliers for innovative collaboration, even when they’re not involved, increases confidence in the relationship.  And communication fosters a sense of collegiality and (dare we say it) friendship.

Commitment

Many will tell you that a personal relationship without a commitment is a flirtation.  Are you flirting with suppliers? Or are you in it for the long haul?

When you make a commitment, you inspire trust.  You’re a known quantity that’s taking the relationship seriously.  Where there’s trust, there’s a foundation for mutually-realized benefit for years to come.

Trust

Why would a supplier contribute ideas to product development in an environment which didn’t feel stable?  

Establishing trust brings out the riches of supplier knowledge that creates dynamic collaborations, reaping tremendous rewards.  Being trustworthy in the eyes of your partner establishes integrity and reliability. On that, a strong and fruitful bond may be built.

Equality

Buying things doesn’t imply the superiority of the buyer over the seller.  When that impression is conveyed, you’ve chosen your interests over those of your partner and over the enduring value of equality.

Power in relationships waxes and wanes but an intentionally stable power dynamic is rooted in mutually-acknowledged equality.

Establishing mutual dependency based on shared goals creates a functional understanding of the value of a relationship in total balance.

We know that relationships are tough. But win-win buyer/supplier relationships are well worth nurturing.  With the right deployment of the four Rutgers-identified attributes we’ve discussed in this post, you’ll enjoy flourishing, creative, collaborative relationships that stand the test of time.

And is there anything more serendipitous than happy relationships?  Contact us.

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