Businesses must become a ‘customer of choice’ to secure supply, according to Inverto
As we enter a third year of global supply chain issues, procurement managers must ensure their supply chains are secure.
International procurement and supply chain management consultancy, Inverto, offers a potential solution to secure supply. It argues that building C-suite relationships with key suppliers, essentially becoming a ‘customer of choice,’ is key to securing supply.
Lina Tilley, Principal at Inverto, argues that global supply shortages have left some suppliers unable to serve customers. This enhances the risk that less preferred customers could be dropped.
As a result, Lina suggests companies need to reflect upon why they are not the preferred partners of their suppliers. She offers four key steps to becoming a ‘customer of choice.’
Four key steps to securing supply
Firstly, businesses must build relationships at C-suite level. “If a supplier is a critical one then it’s critical for the whole business, not just the procurement team,” Lina said. “It’s not sustainable for C-suite leadership to treat shortages as an issue mainly for the procurement team. They now have a clear role to play in ensuring security of supply.”
Second, companies should work in partnership with key suppliers to get more out of the relationship. Lina explained: “If a supplier-customer relationship is a true partnership, then suppliers can benefit much more from it. Many supply markets are changing rapidly and the best way to access this is close collaboration with the supply chain.”
Next, pay invoices on time and be operationally efficient to deal with. “It might seem simplistic to say but customers should always respect the agreed payment and delivery terms,” Lina added. “Creating processed and interface systems which are as efficient as possible has a positive impact across the whole supply chain, and not just for a company’s most strategic suppliers.”
Lastly, businesses must ask suppliers what they want from the relationship. Lina elaborated: “Understanding your suppliers’ motivations is a good start in building a relationship where your business is treated as a priority by a supplier.
“Becoming a customer of choice for your key suppliers is now more valuable than ever,” Lina concluded. “Increasingly, it can now be the difference between being able or unable to fulfil orders.”