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15 June 2012 | Adam Leach
Developing supplier relationships can unlock financial benefits and reduce risk, but buyers should look for vendors with the most to gain when deciding which suppliers to work with.
A CPO Agenda webinar, Achieving business objectives through effective supplier management at ING Bank Belgium, held in association with Emptoris, an IBM Company, found reducing costs was the main motivation for improving supplier relationship management. Cost reduction was chosen by 38 per cent of the 800 delegates, narrowly beating reducing risk, which was chosen by 36 per cent of listeners.
Delegates were also asked what was the main benefit they look to get out of increasing supplier management. The results found that strengthening supplier relationships is the most common action, chosen by 45 per cent. A further 19 per cent selected monitoring risk.
In response to a question about how to drive engagement on the supplier side when it is apparent the main driver is reducing costs, Peter Boon, manager of procurement intelligence at ING Bank Belgium, said both parties need to benefit. “You should select suppliers who will benefit from the improvement. It should be a win-win for both,” he said.
Boon also recommended buyers set up alerts for suppliers’ financial reports and releases so they are kept informed about operations and can plan, if a supplier show signs of facing financial troubles.
☛ A replay of the webinar will be available for download from Monday via the CPO Agenda website.