Relationships are tough. Whether it is with your significant other, your friends, or your business associates, each of these unique connections requires communication, attention to detail, and most importantly, trust between both sides. You learn and grow together, functioning as a well-oiled machine that sets, accomplishes, and celebrates goals while facing the challenges that occur along the way. Yet, when one of these core founding principles fails to be fulfilled by either side of the relationship, we all know how the story usually ends.
Having a vendor relationship for your brand follows similar principles and life cycles – it is built on the notion of trust and is assessed over time by the timing and quality of the deliverables produced along the supply chain. The more efficient a supplier is in its sourcing and production processes, the better equipped your brand is to meet its standard of high-quality. For suppliers, the more production orders their customer brands request, the more ability they have to build a strong infrastructure that manages the amount of production orders received at any given time.
However, the modern supply chain has become more complex and shifted the black and white nature of a transactional brand-supplier relationship to favor building and maintaining vendor relationships focused on long-term volume commitments. Rather than simply being another block in the supply chain that can be disposed of when an inconvenience occurs or short-term contract expires, suppliers are now becoming strategic partners in the fashion supply chain with business goals that align with the core values and interests of the brands they serve.
As they continue to grow and adapt across the fashion industry, it is important to consider the effectiveness of your strategic sourcing and supplier relationship management (SRM) strategy. Is it streamlining and improving the processes in the brand-supplier network? Does it effectively vet and audit potential and current vendors in the supplier management process? How well does it maintain a vendor relationship? Consider these questions as we offer tips to enhance your supplier relationship management and build long-lasting vendor relationships.
Establish Clear Communication Channels
While self-explanatory, establishing and maintaining a clear, open line of communication for your brand and its suppliers greatly impacts the efficiency and effectiveness of your supplier relationship management strategy. It nurtures a close vendor relationship by breaking down traditional adversarial bargaining that prioritizes the price of finished goods as the main, and sometimes only, focal point of discussion. Instead, suppliers are treated as true business partners whose sourcing and production processes align with the values, interests, and goals of the brand and its image in the fashion industry. With open lines of communication, your brand and its suppliers will be able to:
- Stay Informed – To have an effective supplier relationship management strategy, it is important to provide regular updates to your supplier on your strategies, goals, and plans. By letting them know where they fit in the grand scheme of your brand’s business model, you’re fostering a healthy vendor relationship where communication acts as a strategic outline for improving supply chain operations rather than a back-and-forth negotiation process.
- Understand Each Other – Your brand and its supplier have their own business goals and objectives and issues will arise that make both parties tick. It’s important to know these points of frustration when negotiating a supplier relationship agreement in order to develop strategies to navigate them when they arise. This in turn, builds a foundation of trust and accountability.
- Conduct Supply Chain Risk Management – Both you and your supplier need to collaborate to identify weak points in the supply chain that could result in a disruption. Doing so will ensure that both parties find solutions and adopt strategies to mitigate a supply chain disruption to maintain operations.
Integrate Technological Tools
Procurement process teams need dynamic work tools in place to develop and implement effective sourcing strategies that provide valuable insights and data on potential and current suppliers’ activities. How do suppliers obtain raw materials? What production processes do they use? How are their financials and do they consistently deliver payments and products on time? You can assess suppliers and their performance and reliability by integrating:
- Supplier Relationship Management Software (SRM) – SRM software centralizes supplier-related data onto a single platform, helping your brand evaluate suppliers and their overall performance. These software programs are designed to ease communication and improve collaboration between buyer-suppliers to conduct supply chain risk management, consolidate and distribute contracts, request quotes and payments, and monitor supplier compliance to industry regulations.
- Procurement Software – Procurement software organizes and manages all the purchasing data accumulated in the buyer-supplier network. These solutions provide a set of tools that automate the purchasing process, enabling you to request and approve purchase orders, deliver them to suppliers using their preferred delivery methods, match invoices to orders, and analyze purchasing trends. Integrating a procurement software solution can reduce costs, improve operational efficiency, and create greater transparency in your vendor relationship.
- Blockchain – A new emerging technology that can improve logistics management, blockchain technology can build full transparency, traceability, and accountability between all parties in a vendor relationship. Acting as a secure, digitized ledger of all transactions across the supply chain, your supplier relationship management can benefit from blockchain’s tokenization and smart contracts. These can execute automated tasks in the procurement process to streamline payments and invoicing and manage inventory in addition to identifying errors and disruptions that may occur.
Use a Procurement Streamlining Platform
Sometimes the procurement process in supplier relationship management is a hassle. You may not have the necessary people and resources in place to properly research, manage, and evaluate each and every vendor relationship in your supply chain network.
Fortunately, you’re in luck. By signing up for the MakersValley platform, your brand can save time, energy, and resources in its supplier relationship management strategy and focus on what’s important – producing high-quality fashion for your consumers. The suppliers and factories in the MakersValley network are fully vetted and verified as authentic, reliable sources of production known for producing high-quality fashion. For every production order requested, whether it be sampling or small and large batches, you will be informed along the way with picture and video updates that detail the progress of your orders as they move through the manufacturing process, establishing the communication, trust, and transparency that you need to have a successful vendor relationship with a supplier.
With the addition of Orma, your brand can further expand its supplier relationship management goals by inviting suppliers into their network to contribute to Orma’s unique, customizable Product Experience Pages to tell and sell the story of how a garment transforms from being a raw material to the final product to customers.