The procurement space remains one of the most dynamic, especially in dealing with suppliers to ensure they deliver products and services that are essential to business development and revenue generation.

In our area of operations, that is the supply chain in the oil and gas, telecom and construction industries, suppliers remain the bedrock to the successful delivery of these capital-intensive projects.

In the dynamic landscape of modern business, the significance of robust supplier relationships cannot be overstated, especially in our part of the country where we literally have to import all essential commodities.

A well-nurtured and mutually beneficial relationship with suppliers can drive efficiency, innovation, and ultimately, competitive advantage over other organizations. At Fitzgerald-Bassey Consultancy Limited, our years of dealing with suppliers on behalf of our clients have exposed us to how we can effectively optimise supplier relationships.

We have identified four cardinal principles on how we can create a win-win situation for both parties.

The cardinal points to beneficial supplier relations are the following:

1. Building trust with your suppliers,

2. Regularly monitor supplier performance

3. Managing risk 

4. Investing in relationships.

Building Trust with Suppliers:

Trust forms the cornerstone of any successful relationship, and supplier relationships are no exception. This goes without saying that right from the sourcing stage, there must be the development and deliberate attempt by both organizations to foster good relations. Establishing trust is premised on clear communication, transparency, and integrity.

As a supply chain and procurement professional, be upfront about your expectations, requirements, and challenges. Conversely, take the time to understand your supplier's capabilities, limitations, and needs. This will give you a better idea of their operations, strengths and weaknesses thereby making it easier for you to appreciate their efforts. Consistently meeting commitments, regular engagement and resolving conflicts further strengthens trust. By fostering an environment of trust, both parties can collaborate more effectively thereby driving shared success.

Performance Monitoring:

Effective performance monitoring ensures that suppliers deliver on their promises consistently. Right from inception, establish key performance indicators (KPIs) aligned with your business objectives and regularly evaluate supplier performance against these metrics.

With these metrics, it is very easy to appreciate how good or bad a supplier is performing. This helps you properly evaluate and also monitor critical performance factors such as quality, timeliness, cost-effectiveness, and responsiveness. As an organization, you must make attempts to identify areas for improvement and provide constructive feedback to suppliers.  Feedback should be a good guide for growth.

Additionally, brands and organizations should consider incentivizing high-performing suppliers through reward mechanisms, such as performance-based contracts or volume-based discounts. By closely monitoring supplier performance and incentivizing excellence, businesses can optimize value creation and maximize revenue potential.

In our case, the institution and operation of our supplier portal have been very instrumental in monitoring the performance of our suppliers. This has led to a tremendous harmony between our organisation and our contractors & suppliers who provide goods and services to our Client organizations.

Manage Risk

Risk is inherent in any business relationship, especially in instances where huge sums of money are involved, but proactive risk management can mitigate potential disruptions and safeguard the continuity for business relationships. Organizations should nurture the following principles to encourage good supplier relationships:

1. Identify and assess potential risks associated with supplier relationships, such as supply chain disruptions, quality issues, or geopolitical instability.

2. Develop contingency plans and mitigation strategies to address these risks effectively.

3. Foster open communication channels with suppliers to identify and address emerging risks collaboratively.

At Fitzgerald-Bassey one of the key things we have instituted to mitigate risk is to diversify our supplier base and establish alternative sourcing options. This has helped us to reduce dependency on a single supplier, especially for essential products and services. By prioritising risk management, businesses can enhance resilience and mitigate potential vulnerabilities within their supply chains.