Suppliers are like friends in that some are close while others are more like acquaintances, according to Nick Jones, new CEO at lifestyle clothing brand Joules.
Jones, who was formerly SVP of commercial at Asda, said “shared outcomes” were at the heart of successful commercial relationships.
He told the CIPS Annual Conference 2019 that when involved in sourcing in previous roles, he would step back and measure success by the quality of the relationships between the buying team, the sourcing team and suppliers.
“If you don’t have quality relationships with your key partners you are going to be making life really difficult,” he said. “You can win one negotiation and then lose the next 10 as a consequence because you haven’t looked at it from the perspective of shared outcomes.”
Jones said because it was impossible to have strategic relationships with all suppliers, he categorised them. “Like friends, you have close friends, good friends, acquaintances, and that is the same between your suppliers,” he said.
“There are a handful where you have a really deep critical relationship where you share a lot, you are in it for the long term and you are looking for common outcomes. And that takes time and effort.
“The next tier is perhaps those who are trying to get into that place. You have good relationships, you are transparent and you know where you are going but the mutually dependency is not as key as the strategic partners.
“And then at the outside you have relationships that are pretty transactional. They know that you know that the relationship is, ‘If I need you, I’ll give you a call, and if you need me you’ll give me a call’.”
But to make these relationships work requires total transparency about how they work, he stressed. “You don’t want a transactional vendor thinking they are in a deep strategic relationship with you. You need to be clear.”
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