Importance of Supplier Relationships

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Suppliers provide an essential service for any industry.Whether a company is product or service oriented, it usually relies heavily on suppliers in order to meet their customers’ demands. Companies today rely more on suppliers than ever before to cut down costs and improve quality. Because of this, every company’s approach to suppliers should be part of their strategic plan. Unfortunately, many business owners do not see the value in developing strong relationships with their suppliers. They simply assume that placing the orders puts them in the leading position. Taking advantage of a supplier and making unfair requests will only hurt a company in the long-run. Having a good relationship with suppliers is vital to the success and growth of a business.When a group of senior executives in the United States and Europe were asked what they thought were the most important skills for a supply manager to possess, they all agreed that relationship management skills were fundamental. Relationship management skills are defined as “The ability to act ethically, listen effectively, communicate, and use creative problem solving.” This enables the business to incorporate the process integration into their practices. Integration involves bringing various groups together to collaborate or share information in order to solve problems and/or achieve strategic goals (Monczka, Handfirld, Guinipero, & Patterson, 2009). In today’s marketplace, having a healthy vendor and supplier relationship will lead to a competitive advantage. According to the article Building Deep Supplier Relationships, relationships and collaborations are “the supply chain’s lifeblood.” It seems as though nobody grasps this concept more than Japanese corporations such as Honda and Toyota. These two companies have created excellent relationships with their suppliers. The benefits to this are quite evident. Toyota and Honda have quicker production times than most of their US competitors. Where a US...
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