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Strong supplier relationships can offer significant advantages to businesses of all kinds and in all sectors. That’s why we at BSC have a real focus on matching the right suppliers with the right organisations. After all, strong relationships are mutually beneficial, and can last for years.

In this post, we’re going to dive into the benefits of building relationships with suppliers as a business. Whether you’re just launching a startup or you’ve been in operation for years, you might discover some advantages you hadn’t previously considered.

8 advantages of good supplier relationships

1. Reduced costs

One particularly important advantage of positive supplier relationships is that they can help you lower your business costs. This is of course something every organisation is keen on, but how can great suppliers cut your expenditure?

Procurement costs can often be reduced once you’ve built a relationship with a supplier, as they offer you incentives to remain a customer, such as discounted rates or reduced delivery costs. Setting up deals with new suppliers often involves hefty initial costs too, so having a reliable supplier for an extended period of time saves you money in this way. 

BSC is on hand to help you establish mutually beneficial supplier relationships, helping to keep your costs down and introducing you to reliable partners that will support the growth of your business.

2. Increased efficiency

Another huge benefit of building relationships with suppliers is an increase in efficiency. As businesses get to know each other well over time, both can benefit by streamlining the procurement process. This could lead to less waste, faster lead times, and a general improvement in the flow of operations. 

Issues in the ordering process will inevitably arise over time, but if you have a strong relationship with your suppliers, these problems should become easier to overcome. This all stems from each organisation knowing the other better - what each wants to achieve, how it operates, what issues are likely to pop up, and how they can be dealt with as quickly and painlessly as possible. 

3. Offset price volatility

Customers don’t like huge fluctuations in prices. No one wants to spend more than they have to, and jumps in market prices can easily prevent a prospect from making a purchase. Sometimes these fluctuations are down to commodity prices and other factors that are out of your control as a business owner. But good supplier relationships can help here too.

If you have a great relationship with those who supply you, you might well be able to take advantage of scaled increases in cost, or even fixed pricing, in return for fixed-term contracts or minimum order levels. This takes some of the anxiety away from inevitable supply cost changes, and means you can be more confident in setting your own prices, knowing that you’re not going to put off your customers with regular fluctuations. 

4. Supply chain consolidation 

Linked to increased efficiency, the flow of a supply chain can be optimised when buyer and supplier establish a strong bond and begin to understand each other well. The more one organisation works with another, the better they understand each other. Often in a good supplier relationship, each business will adapt its working practices to accommodate the other, which can bring significant operational advantages. 

Optimising and consolidating the supply chain has other benefits too: it can reduce the number of suppliers you need to deal with, making the process simpler and potentially cutting costs, as initial deal fees with other suppliers can be avoided. BSC can help streamline your procurement process by connecting you with reliable suppliers. 

5. Outsourcing 

Outsourcing can be a great way to free up time when you’re running a demanding business. This is especially true if you’re launching a startup, as you may already feel overwhelmed with the huge amount of tasks that need taking care of. Well, if you have a positive supplier relationship, they may be able to take on some of your responsibilities, leaving you freer to tackle everything else on your to-do list.

Activities that could be outsourced include managing inventory levels, and certain tasks related to customer care. Outsourcing can enable you to focus on core competencies, help you scale your business and potentially reduce costs. 

6. More reliable service

Strong relationships often translate to consistent access to high quality supplies, which contributes to delivering exactly what the customer wants. Customers also want to know that when they place an order, they can rely on receiving it at a set time. Reliable suppliers are vital to ensure this, thereby enhancing brand reputation. 

Collaborative supplier relationships can also lead to innovations in design, functionality and efficiency, helping to improve the end product. Many customers also value sustainable brands, and partnering with suppliers you know have environmental policies in place could help to strengthen the eco claims of your own organisation. 

7. Risk management

There are risks in the operation of every supply chain, and crises unfortunately do occur. But a strong understanding between buyer and seller can help mitigate these risks and provide solutions for any crises. 

Organisations that understand each other, as we’ve touched on, can more quickly find solutions to problems that occur, than new suppliers, or those with less insight into the inner workings of your business. Where there are strong relationships established, it’s in the interest of each party to support the other when support is needed.

8. Innovation and growth

There are a number of ways in which positive supplier relationships benefit businesses in terms of innovation and growth. One is collaborative product development. Suppliers often have specialist knowledge and expertise that can inform improvements and innovations to products, when combined with a business’ own insight. 

We’ve mentioned efficiency already, but this is worth restating here. Every way a business can find to be more efficient is a win, and a smooth procurement process, perhaps including outsourcing of some tasks, is something worth aiming for. Regular communication with suppliers and feedback from both sides is also a great way to foster continuous improvement, improving processes, products, and brand reputation. 

To conclude…

As we can see, giving some time to supplier relationship management certainly has its benefits. It can save your business money - and who doesn’t want that? It can also increase efficiency, making your organisation more of a well-oiled machine and less of a one-man band. And it can put your mind at ease by offsetting market volatility, and can consolidate, simplify and optimise your supply chain. 

Positive relationships can save you valuable time if you trust your suppliers with outsourced tasks, and boost your brand reputation thanks to reliable, quality supplies and collaborative suggestions. They can mitigate against risk and crises, and help your business innovate and grow, when your insight and feedback and that of your suppliers is combined. 

So yes, there are some significant benefits to consider. Which is why signing up with BSC makes sense, so that you can find the best suppliers to collaborate with. Sign up now and let us connect you to your future growth partners. 

You can read more about our suppliers here.

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