Upending Vendor Norms: Building Supplier Relationships That Last

Published : August 21, 2015


The relationship between a logistics vendor and their client is just like any other: The more effort that goes into it from both sides, the better the results. Vendor management has a tendency to fall back on "the basics"—fill rates, shipping speed, bids and so on—but fails to inject innovation into their value proposals as a common practice. With business evolving and embracing trends like the internet of things and omni-channel marketing, offering up the basics isn't going to be enough to stay a wandering eye. If business decisions were still made solely on base-level pricing it might be, but those days have ended in the face of technological growth and demand.

Right Hand, Meet Left Hand

While there's always going to be a certain amount of proprietary process under wraps, service providers with an eye towards relationship-building should always want to know as much as possible about your company: Do you have a new initiative in the works? Are your competitors offering something that you can facilitate for them? Talking Logistics' Adrian Gonzalez underscores the need for ongoing, open communication and a little reconnaissance to help the wheels of progress on their way; if a vendor passively waits for their client to tell them needs and wants, there are a lot of valuable opportunities speeding by. Your company didn't achieve success by remaining passive, so why should you choose vendors and partners that use that (lack of) strategy?

Questions, Answers and Proactive Work

Implementing vendor management best practices doesn't always mean making adjustments to an existing vendor relationship; sometimes it means making sure you're choosing the right vendor to begin with. Promotional pricing and hard sells may work in the short term, but lasting client-vendor relationships are built on mutual benefit, not pressure or exploitation. Look beyond the pricing sheet when considering a new or auxiliary vendor—they should be put through the paces the way you might a potential employee. If their answers are focused on vague promises rather than targeted plans that incorporate real-time data from your company, ask yourself if they're really going to be able to keep up. The time to discover that a vendor isn't up to snuff isn't midway through a busy season, it's before the production line ever starts rolling. By committing to a more-than-a-bid assessment process for new vendors, you'll ultimately be saving time and money that would otherwise be spent playing catch-up.

Be Willing To Meet Halfway

There's a good reason that vendors are often called "partners" in the supply chain: They share the responsibilities and risks of selling and logistics as well. If you'd like to see a new technology or service offered, don't place an order and wait impatiently. Make it a bullet point in your vendor management best practices to ask your logistics provider what they need to make it happen. It may be something as simple as restructuring your data feeds or as complicated as financial backing, but you won't know if you don't ask. Patrick Burnson advises shippers to "incentivize" their logistics vendors' innovative efforts by promising a certain volume of use, recommendations and reviews, and so on. While this B2B outreach won't mitigate the risks entirely, it does put a very attractive carrot on the end of the stick. 

Vendor management is challenging all on its own, but if you minimize miscommunications and troubleshoot problems before they have a chance to happen, you're already halfway there. Invite your top logistics providers "into the huddle" and let them know where your goals lie—you might be surprised at the amount of solid advice and solutions they can bring to the table. Until the day comes that mindreading is an upcharge alongside overnight delivery, it's going to take the efforts of both your company and your vendor to make shipping run as smoothly as possible, as often as possible.

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Topics: Vendor Management

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