UK supplier relationships have become more mutually beneficial compared to five years ago, according to a survey.
The survey, by Barclaycard Commercial Payments, found three quarters of procurement leaders (73%) said relationships with suppliers had strengthened over the past five years.
The survey found a similar proportion (76%) believed buyers and suppliers were communicating more openly about business strategy.
The research said half (48%) of procurement teams contacted preferred suppliers once a week. “Communication is king,” said Barclaycard.
Supplier relationships are lasting longer, as seven in 10 buyers now prefer to have “longer-term” relationships. Over half of respondents say that contracts are lasting at least two years.
More businesses (61%) are worried about paying suppliers on time than they were five years ago.
Currently, buyers said they were paying suppliers on schedule three quarters (73%) of the time. Slow internal processes and complex procurement processes have been identified as the main reasons for late payments.
Reputational damage caused by late payments to suppliers and poor supplier management has become a rising concern as 65% of respondents say they are now more concerned by public perception of how business’s treat suppliers.
Barclayscard suggest this could be a result of “increasing pressure” from the government to meet agreed payment terms of smaller suppliers.
Marc Pettican, CEO at Barclaycard Commercial Payments, said: “It’s encouraging to see that UK businesses are looking to develop longer-term and more collaborative supplier relationships, built on trust and transparency.
“However, in order to achieve this, it is vital that they have access to tools and systems that help them communicate with service providers effectively.”
The firm has established the Precisionpay Hub, a payment platform for buyers and suppliers to reduce pay-to invoice time and simplify the process.
Pettican said: “By connecting businesses directly to their suppliers, we hope to simplify the procurement process, saving both parties time and money, while ensuring suppliers get paid on time more often.”
Around a third of procurement leaders highlighted the need for businesses and suppliers to understand each other’s strategic priorities when asked how supplier relationships could be improved further.
A separate survey by logistics services firm BluJay Solutions on what drives supply chain priorities and innovation found an improved end result and “enhanced customer experience” were the main reasons supply chains innovate.
Business analytics and real-time visibility capabilities were ranked as the top supply chain investments by respondents.
Real-time freight visibility was a popular investment in the shipping industry, and the capability was voted the most important in supply chains for delivering top customer experiences.
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