Research Endorses Supplier Partnership
Recently conducted research across a wide variety of business categories reveals that companies that treat their suppliers as partners have measurable financial benefits. In its 2003 study, "Negotiating and Managing Key Supplier Relationships," consulting firm Vantage Partners looked at the benefits of applying relationship management processes and metrics to supplier relations. The study of 114 companies found that:
- When asked how much more value (in terms of cost savings, innovation, quality, etc) is delivered by suppliers with whom a company has a strong working relationship verses suppliers with whom the company has a poor working relationship, almost half of the respondents said that strong working relationships deliver at least 50% greater value than poor ones.
- Procurement professionals also stated that they could improve their company's bottom line by realizing savings of $43 million annually through the application of strategic relationship management tools and processes to key supplier relationships. Respondents who stated their answer with the most confidence, reported that on average, they could save almost $56 million to their bottom line.