There is a common misconception that a business only relies on its customers. Indeed, customers are the backbone of any business. Nevertheless, suppliers are the fuel for any business, as they constantly pump up the daily operations of any business. As per a study in 2020, 65% of supply chain disruption was initiated by tier 1 suppliers. Thus, it signifies the importance of nurturing symbiotic relationships with suppliers, also called supplier relationship management.
Large enterprises pay heed to their suppliers and customers equally and spend considerable time selecting suppliers. Successful businesses not only carefully choose suppliers, but they also urge and support long-term partnerships with their suppliers. If you are missing out on fostering relations with your suppliers, do it now.
This write-up will help you understand the importance of sustainable relationships between suppliers and businesses.
To Get Exclusive Discounts
As per statistics, raw material cost or total supply chain cost makes up 55% of the product’s final cost. Hence, it is vital to set a cap on raw material costs, which is possible with long-term relationships with suppliers.
Being a regular customer of your supplier gives you the edge of being their loyal customer. Consequently, you get exclusive discounts on frequent purchases. Also, it helps keep your product competitive enough to penetrate the market.
To Rely on Superior Quality
The final product mainly relies on the components or raw materials used in it. Therefore, it is paramount to ensure better or similar-quality raw materials each time. For example, an auto repair and maintenance company uses automotive masking tapes while spraying and painting on a car. If the quality of the masking tape being used varies every time, it will also impact the efficacy of the final paint.
Hence, it is crucial to maintain raw materials or component quality every time. To avoid the daunting task of checking the quality of all raw materials each time, it is preferred to use raw materials from the same supplier. It helps in:
- Lowering quality evaluation time
- Maintaining the quality of the final product or result
- Getting support for compliance documents from suppliers
To Expedite Order Fulfillment
The third critical factor in any supply chain is speed, or, as per Capgemini, “the first profit driver”. Businesses must maintain sufficient stocks of raw materials to sustain their operations. Shortages in raw materials can have a domino effect on the entire supply chain. These shortages can lead to delays in preparing and delivering finished goods to end-users, negatively impacting the business.
To avoid these problems, rely you must rely on trusted suppliers who can prioritize your orders promptly. That helps you avoid bottlenecks. Sustainable partnerships with suppliers,suppliers expedite order fulfilment and facilitate other services like timely delivery. Often, such suppliers prepare the necessary stock, ensuring you will avoid any unexpected delays.
To Benefit from Adaptability in Requirements
Long-term supplier relationships are like old friends who know your likes, dislikes, needs, and requirements inside out. This familiarity translates into efficient and personalized service, where tailoring products to your specifications becomes second nature. Whether you require personalization, timely delivery adjustments, or quantity changes, relying on your trusted supplier offers complete flexibility.
Moreover, many businesses prefer single-sourcing platforms. This feat is achievable only through long-term supplier partnerships. These suppliers often go above and beyond by fulfilling orders for products not even in their catalogues. Hence, they prioritize your demand and source it for you.
To Avail Flexible Payment Terms
Capital flow is essential for any business, as it fuels various critical processes such as daily operations, business expansion, and crisis management. Real-time payment solutions are gaining popularity as a potential solution to address these needs. However, many businesses struggle to find the right Real-Time Payment (RTP) system for their B2B transactions.
As a result, companies often seek suppliers who can offer flexible credit facilities. It’s important to note that establishing such services requires a foundation of trust and credibility. Nevertheless, both typically develop over time through long-term partnerships between suppliers and businesses. Building a sustainable relationship between suppliers and enterprises is critical to fostering the trust necessary for flexible payment terms, particularly credit facilities.
To Quickly Resolve Complaints
Obtaining high-quality raw materials or components from Tier-I suppliers is essential for ensuring the overall quality of the finished product. This requirement extends to premium packaging materials, as they are pivotal in enhancing the product’s appearance.
Despite rigorous quality control measures and scrutiny, it’s not uncommon to encounter issues with the materials supplied by your vendor. Therefore, establishing a solid working relationship with your supplier is crucial for effectively troubleshooting these issues. This enables them to reevaluate the materials and work towards resolving any problems they may encounter. Such understanding and cooperation are often not guaranteed in newly established supplier relationships.
Seal The Deal
As per Harvard Business Review, it is difficult to maintain long-term relationships with suppliers. However, at AAB Industries LLC, being a supplier of packaging material, we mainly focus on bolstering our relations with our customers.
Our top priority is maintaining sustainable partnerships with our customers and helping them in their supply chain. We are dedicated to not only meeting our customers’ packaging material needs but also exceeding their expectations through our commitment to quality and service excellence.
