It’s common for suppliers to speak of their ‘partnership’ approach to customer (or client) relationships. But can you really ever be in partnership with suppliers and what makes a supplier relationship truly a partnership?

What is partnership?

Partnership is a concept that has many meanings and what constitutes partnership will vary from organisation to organisation. Perhaps the most important aspects are adaptation and joint ownership of problems and requirements. It’s a two-way relationship which changes over time.

What are the benefits of partnership?

The benefits are that there is consistency in your supply chain and you have access to the additional skills and perspectives with understanding that is built up over time. If innovation and adaptation of your own offering is important, having your key suppliers helping to innovate and adapt what they supply to you will help you deliver.

Apple is a great example of this. There is surely no way they would have been able to maintain their relentless rate of innovation if they had to fund, build and operate all the elements of their manufacturing supply chain.

And the challenges?

Of course, it’s not crucial that every relationship you have with suppliers is a partnership. A supplier that wants to be a partner may – in the buyer’s eyes – spend too much time focusing on innovation rather than the basic. It may also mean that they target margins that support product development rather than reducing costs.

One of the main challenges for procurement partnerships is the need for a more balanced approach to negotiation. Constantly playing hardball won’t foster an atmosphere of partnership over the long term and raises the question of how much value your organisation places on the partnership. How much of a premium would you be prepared to invest?

How do you know a supplier relationship is a partnership?

Like any relationship, how you interact with your suppliers will change over time and be may even be different from month-to-month depending on the major initiatives you’re focused on. However, there are a few things that characterise a partnership.

• Trust and respect: it seems obvious but it’s more than possible to trade with a supplier without trusting them or sharing information with them
• Long-term, shared planning: you invest time in your key relationships and work together to address common goals
• Providing solutions rather than reporting problems: this really marks out a supplier as a partner
• Honesty and transparency: focusing on these in formal feedback and ongoing communication help with the both the day-to-day running of the relationship and the long-term planning
• Pragmatism: sometimes extra work is needed to get things done – the partner supplier accepts that they may see reduced margin on occasion, the partner buyer makes allowance for this