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How do I select the right network of suppliers?

In years past, the majority of retail leaders played the part of adversarial “boss,” and suppliers played the role of humble subordinate.

Today, the greatest leaders must formulate multi-channel partnerships — up, down and across — in order to achieve successful dynamics within an organization.

faq Optimal results can no longer be achieved by simply holding the sole position of power where all decisions are made at the apex. German scholar, Johann Wolfgang von Goethe said it best: “The person who occupies the first place, seldom plays the principle part.”

The realization that the conductor of an orchestra never holds a musical instrument is the genesis of success in today’s modern organizations. In floriculture terms, quality product for our customers is impossible to achieve without a strong multi-channel organization of virtuosic instrumentalists performing in rhythm and harmony.  

Carefully-selected suppliers should be at the apex of important decisions that affect business profitability, diverse product assortments, educated staff and satisfied customers. But easier said than done, right? No doubt, there is a balance that must occur in every organization between strong leadership and the key principles of a successful supplier network.

Here are my Top Five:

1. Build an organizational platform in which suppliers are able to give their best.

rightsupplier1 The faster and more efficient good decisions can be made at the buying level, the more successful the organization will become. Basic protocols of planning timelines, organized product reviews, P.O. execution, receiving guidelines and payment schedules will clear the path for the more creative, customer-facing activities to thrive.

2. Honesty works both ways.

Complaints, when given in a professional manner, can help both parties achieve what’s best for the consumer. An open forum where suppliers can freely provide input on how the buying organization can improve is equally important. Because of past negative ramifications, some suppliers may be hesitant to provide constructive critique. As a leader, assure your suppliers that feedback is not only accepted… it’s the lifeblood of a good working relationship for the future!  

3. Think outside the price box.

The price an organization pays for products is an aggregate of the cost-of-goods, PLUS the tertiary services a supplier provides to the buying organization. It’s counterproductive for each individual party to try to negotiate a deal that is only right for themselves. Both parties must think in terms of the ROI for the person on the opposite side of the table, and how both sides can achieve mutual profitability:

a. Is scan data being utilized for better crop planning?

b. Are unnecessary start-stops, P.O. changes, back-tracking and incorrect data being mitigated?

c. Are pack-counts and freight planning fully coordinated and optimized?

d. Are good protocols in place for accurate receiving, QA inspections and quality reporting?

e. Are new communication technologies being used in place of expensive flights, hotels, sample shipping, store education, planning meetings and regional shows?  

Remember, value travels downstream… not upstream.

4. Be a conduit to new innovations and broader markets.

Buyers and suppliers, equally, own the discovery of new innovations and how they’re leveraged to discover emerging markets and build broader growth.

The best retailers are well-studied in new modernizations, and the best suppliers have multiple layers of expertise to bring it forward.   Create an open environment where there is an equal exchange of ideas, followed by a mutually-ambitious follow-through of those ideas.

5. Stay transparent.    

Cat and mouse games are dead and gone. Isolation will bring weakness to the organization and minimize its overall effectiveness.

Create a safe forum where frequent exchanges between buyers and suppliers can take place.

As a leader, don’t aspire to be the best ON the team. Instead, inspire to be the best FOR the team.