How good is your supplier experience – and why you should make it better
At a time when supply is tight, and our suppliers need to decide which customer orders are fulfilled first, we need to find ways to become a customer of choice.
Your suppliers can often face unnecessary administrative burden, poor information sharing, and slow communications. You need to find a way to make it as easy as possible for them to work with you in order to become a favoured customer and ensure they direct products and services your way.
In September 2022, HICX supplier management solutions released their Voice of the Supplier Survey results and it has some startling home truths for procurement teams.
With over 500 suppliers interviewed across a range of sectors, there are many takeaways for every procurement pro out there.
How does your supplier experience stack up?
An urgent piece of work comes in, you don’t really have the time to fit it into your busy schedule but your internal stakeholder is really pushy. You eventually give in and put a rudimentary tender out to market and hope for the best.
Under pressure, it is often easier to go with the path of least resistance but you know if you had the time you would have done some market sounding or market research first.
When push comes to shove it’s often the supplier voice that gets left out of this dialogue – all conversations happen inside the organisation only.
This attitude can seep into the supplier management when the contract is signed, and as a result it can become an ingrained way of being and an accepted culture within some organisations.
We need our suppliers
The procurement sector has been recognised for the critical role that procurement teams have played in the pandemic, managing complex supply chain issues and our suppliers were right there with us. They have been facing the issues with us directly, while also facing their own supply chain crisis internally as well.
When the dust settled rather than capitalising on the time and innovation that was born out of the urgent situation, it seems some workplace cultures have reverted.
The collaboration and co-creation mindsets that were embraced in the pandemic seem to have lost their way and relationships are reverting back to the traditional two sides of buyer and supplier.
We need to re-centre and start to put ourselves in the suppliers shoes and understand their environment, operating models, supply chains, and harness their innovation.
It’s time to improve your supplier experience
To begin understanding the suppliers’ perspective, we must understand what their pain points are.
The report covers many areas, but the top 3 supplier pain points are:
- 60% of the 500+ suppliers that were interviewed are struggling to serve their biggest customers.
- 47% of suppliers struggle to resolve simple queries or achieve resolution and feel communication is the biggest area of improvement required.
- 33% of suppliers have to log on to 10 or more systems per client and report under utilisation of tech and burdensome administrative tasks.
The best thing about these pain points is they can be easily solved!
It’s time to work with our suppliers
We need to work with our suppliers now more than ever. Of the survey respondents, suppliers stated they are actively working with their clients on the following issues:
- Materials shortages and solutions
- Diversity and Inclusivity
- Labour shortages in the supply chain
- Brexit / other economic and geopolitical events
- Zero carbon initiatives
- ESG initiatives
Wouldn’t it make sense to work with the market rather than trying to solve everything ourselves?
Have supplier empathy
The organisations that have continued to build on the momentum from the height of the pandemic are starting to see tangible benefits in their supplier relationships.
How have they done it? They have adopted a commitment to take the traditional Supplier Relationship Management model and turn it on its head. Where the traditional model focuses primarily on how the buyer will interact with the supplier and where they fit in the supplier segmentation model. Instead, future focused teams are adopting a supplier perspective.
Having supplier empathy and adopting a supplier-centric mindset will help to achieve organisational and project goals faster. Why? Because if you remove the friction, improve communication, resolve queries faster, and work in a genuinely collaborative way – you are all working to remove any barriers to success. Both parties also have the same expectations and understanding of the nature of the work required to get there.
HICX notes that by incorporating the suppliers’ perspective, there are a number of benefits that could be gained, including: lower prices and better service, greater levels of collaboration, higher supplier engagement, better quality of data, lower levels of risk, and higher levels of compliance.
10 ways to build your supplier empathy
Here are some small ways to begin your journey towards a supplier-centric approach:
- Commit to understanding the supplier experience
- Allow additional time for suppliers to respond to bids and understand the time and cost involved in tendering.
- Include suppliers in the early planning phases of a project through early market engagement and supplier sounding.
- Consider metrics that measure the relationship in its entirety, not just whether the supplier is delivering on time. What might your organisation be contributing to that could help improve the deliverables?
- Improve technology and data collection
- Limit administration to unlock value add activities that your suppliers could be working on instead
- Improve communication
- Understand the supplier point of view and have reasonable expectations
- Work together on joint innovation and collaboration initiatives
- Respond to queries and seek to prioritise resolving queries
Still need convincing?
HICX note it is worth considering this question “if there is another crisis, or if suppliers have a limited amount of stock, who do you think they will be giving their supplies to?”.
It is the clients that they value and can work collaboratively with.
For more information view the full report and begin your supplier-centric journey.
Find more Supplier Relationship Management news, insights, and best practises at Procurious.com.
Read more at Procurious.com:
- Stakeholders Are Your Customers. Ignore Them At Your Peril
- 5 Reasons Early Market Engagement Will Land You a Better Deal
- Supply Chains in 2021: Expect Aftershocks, But the Future Looks Brighter
- Are you annoying your suppliers? Hear what suppliers really want from you!
- Supplier Motivation, A Key Component of Supplier Management
- How Supplier Diversity Can Help Increase Profitability