Building Better Relationships with Manufacturing Material Suppliers

For manufacturers, materials can be one of the biggest costs. For instance, raw materials are the biggest cost driver in the auto manufacturing industry, accounting for 47 percent of total costs, according to Automobile Engineering Partners. And prices aren’t going down. November saw material costs in the manufacturing sector rise for the ninth consecutive month, the ISM Prices Index showed. To keep the cost of materials manageable, it’s vital to maintain a good relationship with your suppliers. Here are a few strategies your company can use to build better relationships with your suppliers and keep your materials costs from rising higher than they have to.

Pay Suppliers Promptly

As with any business relationship with contractors, prompt payments are key to building a good relationship with suppliers. Paying on time not only makes your suppliers happy, it benefits you by making your suppliers more inclined to prioritize delivering your materials promptly. As QuickBooks points out, if your suppliers are slow with turnaround time, this can diminish your inventory, impacting your revenue and your relationships with your customers. When you pay on time, your suppliers are more likely to reciprocate by delivering your materials more promptly, keeping your inventory stocked and your sales flowing.

When negotiating payments, the time to negotiate is before you place an order, not after. Sticking to your original payment agreements will build your trustworthiness in your suppliers’ eyes. If unforeseen circumstances do arise, making you unable to pay on time, alert your supplier as soon as possible so you can make payment arrangements and your supplier can make any adjustments they need to make to their own cash flow projections and budget.

Build Respectful Personal Relationships

Paying your suppliers on time is only part of the larger task of building a personal relationship based on respect, says Maker’s Row. It’s easy to focus on the products your suppliers provide and forget about the personal side of your business relationship. Cultivating good personal relations with suppliers will lay a foundation for a good business relationship, putting a face on your transactions and making vendors inclined to take more personal interest in your business.

To personalize your relationship with your suppliers, take steps such as visiting their office or inviting them to visit your workplace. Reach out through phone calls and emails to congratulate them on their business achievements, update them on developments at your company and invite them to events that you host. Use opportunities such as birthdays and holidays to send greetings and keep your relationship active and up-to-date.

Maintain Good Communication

As in personal relationships, good communication is the foundation of a good business relationship. Good communication will help ensure that your orders are filled accurately without delays due to mistakes. When considering suppliers, look for vendors who demonstrate good communication habits. For instance, o-ring supplier Apple Rubber uses standardized request forms to make it easy for clients to specify exactly what they want, and offers free samples so clients can make sure that what they order truly fits their needs.

Part of maintaining good communication is keeping your vendors up-to-date on developments in your business. This can have surprising benefits. For instance, if your product design changes, your supplier may know a less expensive or more efficient material you can use, provided you keep them in the loop.

Allow for Sufficient Lead Time

Another important key to good communication is giving your suppliers sufficient lead time to fill your orders. Bear in mind that vendors must service multiple clients and may need to adjust their own supply orders and inventory in order to meet your requests on time while also meeting the needs of other clients. The more lead time you provide for your orders, the more time your vendor has to adjust and the better they will be able to fulfill your orders without delays.

In some cases, your supplier may need to make an adjustment in your shipping schedule in order to meet their other obligations. If you can be flexible during these times, your supplier will be inclined to speed up your orders when the time comes that you need something delivered on a tighter-than-normal schedule.

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