This is a guest post from Alan Newton, Founder & COO of Eventopedia, the online marketplace for corporate meeting and event planners. You can follow him @eventopediauk.
Why should event organisers care about supplier relationships?
The answer is simple – having strong event supplier relationships can not just save you money, but it can bring new ideas and best-practices into your organisation, reduce risks and even help build your brand. Unfortunately, the myriad benefits are often missed because event organisers often don’t have a formal process for managing suppliers.
What is supply chain management?
Investopedia defines supply chain management as follows:
“Supply chain management is the streamlining of a businesses’ supply-side activities to maximise customer value and to gain a competitive advantage in the marketplace. Supply chain management represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production, to product development, to the information systems needed to direct these undertakings.”
The interesting aspect of the definition is how supply chain management as a process can add value to your customers and provides your organisation with a competitive advantage in the marketplace.
Who should care about it?
Supply chain management is a broad discipline that touches numerous business divisions and can have far reaching positive impacts on an organisation if managed professionally.
Compared with other business functions, supply chain management has often been overlooked as an essential business discipline in the events industry, with a formal focus only beginning within agencies circa ten years ago and corporate procurement only beginning to be a formal focus in the last seven years or so.
Despite that progress, a formal approach to supply chain management still appears to remain the preserve a handful of the largest event agencies. This is a shame, because it could have a really positive effect on event organisers of all shapes and sizes, as we’ll discuss below.
The HOT Equation
Honest + Open + Transparent (HOT equation) = Strong Supplier Relationships
The more Honest, Open & Transparent you can be with your suppliers, the more likely you are to create strong and lasting supplier relationships. Of course, some information will be sensitive, so it’s a judgment call as to what you can and cannot share with your suppliers in the context of your relationship.
One response to taking an open and honest approach to supply chain management may be the concern that suppliers will utilise your information to curry favour with competitors.
Whilst that is not beyond the realms of possibility, in my experience, the benefits of adopting the HOT equation far outweigh any potential negatives from information that may or may not be passed on to competitors.
It also allows you to understand whom you can trust and where both trust & loyalty can be built.
The HOT equation can be adopted by anyone across the organisation involved in managing a supplier relationships. The better a supplier understands your business, the better the engagement between your organisations, and the more effective solutions can be tailored to the needs of you and your clients.
The HOT equation is all about engagement and providing your suppliers with information that will help them to help you. Too often, I have seen suppliers treated with disdain within organisations, and simply seen as a means to an end, rather than a trusted partner. I tend to think this represents an immature organisation and poor understanding of overall business management.
How to make your company HOT with suppliers
An essential first step towards good supply chain management is to have some form of centralised process. A consolidated approach helps provide structure, expertise, best practice, consistency and clarity to all stakeholders (both internal and external), all of which help to add value across the organisation.
However, while centralisation in terms of policy and process is important, the individual relationship holders across the business should continue to foster the good relationships like they have always done, provided they work within the broader framework and best practices of the organisation.
In fact, it’s very important to build relationships at all levels of your respective organisations to deepen understanding and demonstrate commitment to the relationship, while also sharing functional-specific knowledge and understanding that will be essential to the relationship’s long-term success.
One note of caution – too often relationships with suppliers occur in a silo, with best practice locked up in a single section of the organisation and not shared back to everyone else, which why having a centralised process is so important.
So in summary, keep best practices central, while encouraging personal relationships and function-specific knowledge to flourish across your company.
Some HOT activities to try with suppliers
Some important activities that will help you and your organisation build stronger supplier relationships can include:
- Providing feedback on performance – formally and/or informally
- Be clear about your expectations
- Measure performance
- Celebrate successes
- Work together on failures and what can be done to improve
- Sharing appropriate strategy and company updates
- Suppliers who understand where you are heading can share in the vision and advocate you to potential new clients
- Promoting regular & active dialogue
- Relationships require regular communication to blossom
- Providing avenues to access the organisation
- Encourage interaction across your organisation]
- It helps generate understanding
- It protects the longevity of the relationship should there be any changes in personnel
- Sharing Problems
- Combined resources & solutions can be far more effective
- Promotes innovation
- Builds trust
Being a HOT organisation benefits everyone
Great value can be generated from a concerted and professional approach to supply chain management. However, the benefits will not be immediately obvious to all parts of the business. It sometimes requires a cultural shift to open up to the possibilities of value creation from mature supplier relations, but the payoff can provide significant benefits and competitive advantage.
Therefore, it is important to demonstrate to other parts of your business how strong supplier relationships can have a positive impact. Here is a chart that shows some of these benefits.
Supplier Negotiations
Negotiations can be one of the most critical aspects impacting the success of building strong supplier relations. If managed badly, it can turn a relationship sour very quickly and create mistrust, which can be difficult to repair.
Tips for negotiating to build relationships with longevity:
- Conduct thorough research and collate relevant information
- Take time to listen to and understand what would be acceptable for the other parties involved
- Consider how all parties can benefit from the negotiation, maintaining & building goodwill in the relationship
- Set out your position clearly
- Be prepared to walk away. Never negotiate without options
- Have an alternative plan. If you weren’t prepared for the other side to walk away, then you’ve failed in your preparation and approach
- Remain fair, balanced, and focused upon all parties benefiting from the negotiation
- Don’t make things personal
Applying the right approach has benefits beyond the deal you are able to negotiate. The trust and goodwill such an approach builds will enable you to rely upon the other party to want to do more for you in the future, and support you when you need it. If you adopt a bullyboy approach, word gets around and many will be eagerly waiting for that schadenfreude moment.
Summary
If managed in the right way, by taking an Honest, Open + Transparent (HOT) approach to supply chain management, these stronger event supplier relationships can lead to a variety of benefits including:
- Bringing shared learnings and best practice from suppliers into your company
- Create brand advocacy and word of mouth support in your industry
- Manage risk, costs and develop more accurate forecasting
- Improve and refine your sales and marketing messaging by getting third party feedback
- Drive innovation with ideas for new services & products
What are your supplier experiences? Has building strong supplier relationships brought benefits to your organisation? Let us know in the comments!
