3 Essential Strategies for Trusted Supplier Relationships

Posted: 03/02/2020 - 22:19
3 Strategies for Trusted Supplier Relationships

I recently attended a conference hosted by a supplier that dedicated the entire day to customer feedback on the supplier’s technology offerings and overall services. While many sessions like this take place all over the world, specific nuances about this conference stood out to me. 

  • There were no sales. Typically at events like this, certain agenda items or conversations highlight all the wonderful things the supplier is doing to promote and sell. Not here. The company shared its roadmap and set the intention to listen to customers. 
  • There was no justification. Some customers had feedback that was likely less than pleasant to hear, but instead of arguing about how the opportunity or deficiency came to be, the supplier listened and took it all in.
  • There was openness. Clients completely opened up because they felt their feedback was heard, and the supplier made it clear they truly wanted to learn and improve. 
  • There was trust. Trust is not easy to build, manufacture or earn. It takes repeated, consistent actions from both parties. But, when it’s there, it makes all the difference. 

Some may think that building trusted relationships with suppliers is reserved for those most strategic to the business. While that is an important consideration, one should not stop there. (Note – in most companies, the supplier referenced above would not be considered strategic, though a valuable relationship to ensure day-to-day operations are working correctly.)

What does it take to have a trusted relationship with suppliers?  Let’s explore three essential strategies for developing a relationship built on trust.

  • Work to build a relationship. It might sound basic and almost odd to bring up, but many supplier relationships are just mutually agreed-to interactions, not a relationship. At this conference, every client mentioned their sales rep as the most valuable interaction with the supplier. The reps are helpful, reliable, and go above and beyond for customers, which differentiates this supplier in the marketplace. Likewise, the clients care about the success of the sales reps and know them personally. There was indeed a relationship in what would otherwise be a very transactional category of spend. 
  • Seek to provide and receive open, honest feedback with genuine appreciation and care. No one performs their best all the time and everyone has room to grow. When an open dialogue exists about where and how to improve, and mutually solve problems together, trust blooms.

For example, we’ve all had to give uncomfortable feedback, like letting someone know their zipper is down or food is in their teeth. The person who receives the feedback could react two ways – with appreciation knowing you have their best interests in mind, or with resentment and insecurity thinking that you want to make them look bad. The first reaction occurs when there has been consistent behavior of sharing feedback with everyone’s best interest in mind.  The latter is reflective of large gaps in trust. 

  • Become vested in each other’s success. Building an appreciation for the struggles, work and success of both parties also builds trust and is often where buyer/supplier relationships fall apart. Suppliers are always perceived as trying sell and buyers as fighting to get the best price. Becoming vested in each other’s success means taking time to understand the goals of both parties and developing a plan to achieve those goals together. It might take uncomfortable change, willingness to give and take, and journeying into unknown territories together. However, when that happens, trust in each other grows rapidly. 

Trust between buyers and suppliers results in innovation, problem-solving and rapid advancement of success. When suppliers become an extension of the capability and talent of teams, everyone benefits.


About The Author

Amanda Prochaska's picture
Amanda has built a career over the last 15 years focused on implementing innovative solutions to procurement organizations and has a passion for coaching organizations through large-scale transformations. In her recent role at MGM, she was responsible for implementing and sustaining new, best-in-class sourcing programs and for leading the source-through-pay transformation. Before joining MGM, Amanda served as Associate Director at the Kraft-Heinz Company, where she led the simplification of processes, focusing on cost reduction strategies, supplier development, and technology enhancements. Prior to that, Amanda held various procurement roles within the CPG industry. She also is the author of “Procurement Unstuck,” a blog related to procurement and source-through-pay issues. She serves on the ISM Conference Leadership Board and is the Founding Chairman of the ISM Thought Leadership Council.   
She is now the President of High Performance Procurement (HPP).  HPP is the leading provider of Supplier Development Programs helping CPOs increase the reliability, sustainability, and scalability of the small and medium-sized businesses within their supply chains. By working directly with suppliers, HPP helps install systems and processes that give these important businesses the tools to grow and adapt as the needs of their large corporate partners change. Whether the supplier has 25, 50 or 500 employees, HPP establishes business practices that ensure growing operational and financial success with limited investment on the part of the CPO.