For modern manufacturers, supplier relationships are the lifeblood of their operations. Strong relationships with suppliers are what keep manufacturing lines moving and PO changes from grinding operations to a halt.
Under normal circumstances, SourceDay has found that manufacturers can expect about 40% of their purchase order lines to change from the time they send the PO to the time they receive their order. And that number went up drastically when shutdowns related to COVID-19 peaked earlier this year.
When change happens, particularly when lots of change happens at once, there’s nothing better than knowing you can call up your supplier and work out a plan. But how many times do those plans get lost because they’re not properly documented? And how much are you putting at risk when that happens?
The goal of strong supplier relationships is to help you deliver more on-time, in-full orders to your customers. We’ve put together our top communication tips with exactly that in mind.
1. Admit There’s a Problem
While we’ve heard of manufacturers taking such drastic actions as chartering a plane to avoid late fees from their customers, the problem of supplier misses is not unique. When PO changes get lost in an inbox, manufacturers are left scrambling to get orders out the door, putting relationships with their own customers at risk.
Every business is different, but here are the most common ways we’ve seen poor supplier communication impact manufacturers:
- Too much inventory that can’t be shipped
- Late fees from customers
- Negative reputation for late shipments
- Excess spending to fix problems (overtime, expediting fees, private planes, etc.)
If you’re not sure whether there’s a communication problem in your business, simply pay close attention to your team’s ability to ship on-time, in-full for a few weeks and document why orders fall behind. We’re willing to bet communication turns out to be the root cause of most of them.
2. Stop With All the Emails
There’s a missing link between your ERP and your suppliers, and right now most manufacturers bridge that gap with email.
Email is a powerful tool, but it’s limited. When one supplier and one buyer email back and forth about an order, that conversation is not visible to the rest of the team. This means that if one person gets sick, takes time off, or simply misreads something, all accountability rests on their shoulders.
Communication about purchase orders in flight should take place outside of email, ideally through a tool like SourceDay that allows everyone involved to see the status of all orders. This is the best way to make sure that nothing ever gets lost in an inbox again.
Who Uses SourceDay at Napoleon?
But what about managing relationships, you ask? By all means, keep building relationships through email, phone calls, on-site visits, etc. Those relationships are sacred, and we don’t want to jeopardize that.
But when it comes to negotiating when line item “Bolt #A8905” can be delivered, those conversations are best managed in software.
3. Make It Easy to Switch
At SourceDay, we believe that PO collaboration software should not require a tedious user manual—and that it should be free to suppliers. Done this way, asking suppliers to use software instead of email to communicate is a much smaller request.
Learn more about DuraMark’s experience and find out how they got suppliers using SourceDay’s PO Collaboration in only six days.
6 Day Integration With SourceDay
4. Model Strong Communication
If you’ve got a tool that’s more effective than email, use it. Use it even when things start to break and you need answers from your suppliers fast. It’s easy to fall back on old habits when things go wrong, but that’s exactly when you need a tool like SourceDay most.
If you’ve gotten word from a customer that they need their order even sooner than expected, document the changes in your collaboration software first. Then give your suppliers a call or send an email to let them know.
Suppliers will be much more likely to adopt—and stick to—a communication tool if you do.
5. Hold Suppliers Accountable
One of the unexpected bright spots in switching from email is a newfound ability to hold suppliers accountable. If all communication lives in email, it’s hard to quantify just how often a certain supplier is late or how quickly that supplier usually responds to changes. In other words, it’s difficult to separate your so-so suppliers from your all-star suppliers.
6. Share Your Wins
All of the tips above boil down to making your operations run more efficiently. But if your suppliers only hear feedback when they miss your 24-hour PO acknowledgment rule, they might feel like they’re jumping through hoops for no reason.
That’s why it’s important to share positive feedback with your suppliers, too. When you pull off a difficult customer order, be sure to thank your supplier for helping you make it happen. When you look back at last quarter’s performance, let them know how they helped you hit some important company goals.
The Upside of Change at Dell
7. Ask for Feedback
Along the same lines as sharing some of your team’s wins, ask your top suppliers to give their honest feedback as well. If they have ideas for improvement, questions, or concerns, hear them out. They likely work with several companies like yours and might have valuable insights to share about what works well and what doesn’t.
While you ultimately control the orders, the buyer-supplier relationship is a partnership. Feedback and communication should flow both ways, and we love to help facilitate those conversations.
To learn more about SourceDay, speak to a member of our team today. Your suppliers will thank you.