Supplier management: why is it important and how to do it?

The relationship with suppliers is essential for a company, as they are the ones who will provide products and services to its most important stakeholders: its consumers. Therefore, this relationship cannot be based solely on the expectation that deadlines and commitments will always be met. Supplier management is essential to ensure everything runs as expected.

After all, in the corporate world, relying on luck is practically a shot in the foot. A solid enterprise must understand that, for procedures to function according to strategic planning, management that begins internally is essential.

So, want to learn more about the importance of supplier management and how to do it? Keep reading and find out!

Why carry out supplier management?

Even though supplier management is essential to a business, it was once considered a secondary activity. However, just like the benefits of investing in online marketing, corporations have realized that the current landscape is different, and this type of procedure has become an essential strategic action.

After all, ensuring an adequate supply of raw materials and other customer demands reduces and/or eliminates failures to offer greater quality and customer satisfaction.

Therefore, supplier management can achieve better deadlines and prices, in addition to reducing costs unnecessary costs that only pushed the company away from the competitive race. This also makes it possible to create bolder goals for the corporation's advancement.

How to manage suppliers?

As mentioned, maintaining a good relationship with suppliers is crucial. To achieve this, you should base the relationship on reciprocal benefits, a so-called "win-win" approach, so that it benefits everyone involved. This makes it easier to ensure compliance with agreements and the continuation of a good relationship.

However, before that, it's necessary to define the company's objectives. Based on this information, a supplier management plan and achievable targets can be established.

Once this is done, ensure that all business sectors have organized processes, which includes everything from selection new team members even the raw materials or services that need to be purchased. This makes it easier to identify areas for improvement and manage suppliers more effectively.

Furthermore, there are some evaluation criteria—which vary from company to company—that can be followed to analyze the efficiency of your suppliers. For example:

• Service: Ideally, your suppliers should be flexible when negotiating payment methods, quantity of products purchased and specification terms;
• agility in delivery: delays to the point of leaving stocks out lead to losses sales opportunities. So, make sure that if delays occur, they are not recurring;
• Cost-effectiveness: Prices above the market average may keep the company out of the running. If applicable, consider whether the quality justifies the investment.
• Market experience: research the suppliers' history in the market and references from other companies with them.

Above all, efficient supplier management requires frequent communication between the company and its suppliers. This makes resolving future contingencies easier and negotiations more flexible.

Did you like our post? Take advantage of your visit to check it out too How to choose the ideal steel supplier for your store and deepen your knowledge on the subject!