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Improving Supplier and Vendor Relationships in Manufacturing

Posted June 17th, 2021

Manufacturers often evaluate supplier and vendor prices, but how often are you checking your vendor relationships? A solid vendor relationship can be more critical to your manufacturing company’s long-term success than a vendor’s price. And here’s the really good news — unlike pricing, there’s a lot you can do to create great supplier and vendor relationships.

Communicate early and often

If the coronavirus pandemic taught us one thing, it was that people enjoy face-to-face communication. If you can’t regularly meet your vendors and suppliers in-person, schedule regular video calls. At the very least, a phone call lets you and the vendor hear each other’s voices and get to know each other much better than email.

If you’re only calling your vendor or supplier when something has gone wrong, you’re building the relationship on need, conflict, and stress. That plays out on the vendor side, too. A vendor that only hears from you when things go wrong might hesitate if they receive a purchase order from an unfamiliar name. They don’t want additional trouble in the relationship. From your perspective, you don’t need the delay while they are waiting for confirmation.

Adopt a proactive approach to supplier communication to build trust and confidence. Let your supplier know in advance when you’re expecting a large order to come through. Introduce them to new team members who may be interacting with them, and update them early if leadership is changing. Inform them of any business hour changes or office closures.  These updates make your suppliers feel like they are more than just a vendor; they are an important part of your team.

Treat suppliers with respect

When a customer has unreasonable expectations, how does that make you and your team feel? Stressed? Tense? Resentful? Guess what — your suppliers feel the same way. Unrealistic demands feel like a no-win situation for your vendors. Yes, there will be emergencies, but before you press for an urgent turnaround make sure that this actually is an emergency. If you treat a vendor with respect, they are more likely to want to help you out when that real emergency happens.

Contracts may not feel like an important part of relationship management, but the truth is that contracts create a basis for trust and communication. Your contracts should clearly establish the performance, service, and payment expectations. Communicate clearly, follow-up to clear up any ambiguity before the contract is signed, and then honor what you have both agreed to.

Gratitude is the name of the game for supplier relationships

Everyone likes to feel appreciated. Show your suppliers how much you appreciate them with unexpected thank-you moments. For example, at Mobilization Funding, we sent custom Yeti mugs to our strategic partners as a fun and personalized thank you. Here are a few simple ways to show you appreciate your vendors:

  • Say “Thank you” at the end of every call
  • Send your vendor contact a birthday card
  • Send holiday cards with hand-written notes and signatures
  • When a supplier does you a favor, send them a thank you gift

Treat vendor relationships like customer relationships

Yes, technically you are the customer in this situation, but in industries like manufacturing it helps to treat everyone like they are your customer. (Hopefully, you have already nailed customer experience in your business!)

Just like building a good customer relationship, a solid supplier relationship is built over time. It takes hard work on both sides, clear communication, and unexpected moments of gratitude and delight. Challenges are inevitable in any relationship; make sure you have made enough deposits into the relationship before you start trying to take from it and always take more than you give. Putting the work in changes the nature of your vendor relationship — from a procurement, transactional relationship to a mutually beneficial partnership — and ultimately can help your business establish a positive reputation among suppliers and reach your goals with less stress.

At Mobilization Funding, we specialize in financing options for manufacturing companies. Our Purchase Order financing gets you the money you need to pay your suppliers (and other project costs) and get to work BEFORE you send the invoice. Learn more on our Manufacturing Funding page.

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