B2B relationships affect more than just the communication between manufacturers and their distributors. Buyer-supplier interactions ultimately influence sales, efficiency, and innovation on both sides of the coin. This is why it’s important for organisations to ensure streamlined and effective processes with supply chain partners.
But as supply chains become more complex, so does supplier relationship management. In order to maintain profitability and increase growth, organisations are looking toward digital supplier relationship management to provide a more systematic approach to B2B relationships and improve buyer-supplier connections.
What is Buyer-Supplier Relationship Management?
Supplier relationship management (SRM) evaluates and manages the activities that occur throughout the supply chain. A buyer-supplier solution regularly views key performance indicators (KPIs) and gives both organisations greater insight into critical knowledge, documentation, and product information.
The main goal of SRM is to streamline and improve the processes between a buyer and its distributors so that they can function more collaboratively. With an effective SRM strategy in place, all parties can work to create a business relationship that is mutually beneficial — buyers can increase sales and growth, while suppliers are empowered to access the information they need to work more efficiently.
The Benefits of Digital Relationship Management
In an increasingly digital and globalised world, supply chains have grown in size and complexity, creating a need for innovative digital experiences. B2B sellers can simplify many pain points by applying supplier management solutions. Here are a few key benefits that continue to encourage more and more manufacturers to implement SRM.
1. Efficient and Informed Decision-Making
With all relevant data and information in a centralised location, the decision-making process can be greatly improved with SRM.
Improved Decision-Making for Buyers
Access to qualitative and quantitative supplier data makes procurement faster, while also identifying risks and new opportunities more easily. Having important data available and easy to access means that strategic decisions can be made quickly in order to enhance supplier processes.
Improved Decision-Making for Suppliers
Relationship management platforms also help suppliers refine decision-making operations. Recently, strategic suppliers have begun to play more active roles in innovation along the supply chain. For example, they are now more likely to coordinate with the buyers regarding the production process, new products, or the delivery of goods. Suppliers that have the information they need can make informed decisions and suggestions that help both their production and their buyers.
2. Increased Mutual Trust
Building a trusted relationship with suppliers should be a top priority for buyers. SRM offers increased visibility into supplier relationships and encourages companies to consider the suppliers’ needs and interests.
Over time, a long-term relationship between a company and its suppliers encourages a free-flow of feedback and ideas. This not only creates more efficient supply chain management, but also a more secure partnership that is likely to last longer and benefit everyone.
3. Automation of Daily Tasks
Daily manual tasks along the supply chain can become mundane and time-consuming. Supplier management helps save time and lowers the risk of error with automated workflows and integrations. Reminders, updates, and other repeatable work can be done automatically, freeing up time for team members.
By significantly reducing the time spent manually completing tasks, more focus can be placed on problem-solving and business development.
4. Improved Buyer-Supplier Digital Experience
In order to improve the entirety of a buyer-supplier relationship, businesses need to consider the supplier experience. A supplier that views a partner as organised and easy to work with is much more inclined to support collaboration and help them find success.
SRM solutions provide a more centralised workspace for key suppliers, which in turn allows the partnership to operate seamlessly. Suppliers have a clear view of the manufacturer’s processes and are able to access manuals as well as automate warranty registration. In addition to greater visibility, they can also utilise self-service options to manage their accounts or provide claim reports in a portal tailored to their needs.
5. Long-Term Cost Reduction
There are a handful of ways SRM solutions help reduce costs for buyers and enhance supplier performance. A few examples include:
- Improved communication. More effective lines of communication mean that issues can be resolved quickly or avoided altogether. This can result in reduced operational costs very quickly.
- Minimised costs of new contracts. Relationship management solutions can reduce the cost of finalising a new contract or a supplier relationship agreement. Buyers will potentially spend less time competing and negotiating and with less downtime and back-and-forth, contracts can take effect sooner.
- Improved visibility to identify logistical cost-saving areas. A full 360-degree view of a supply chain makes it easier to spot weak areas and cost-saving opportunities.
- Increased efficiency in the supply chain. Businesses typically see better and faster production when operations run smoothly. Costs from operational delays or mistakes are reduced and production can continue as planned.
With the benefits of SRM in mind, it’s important to note that successful relationships should never be one-sided. Instead, interactions and decisions should be made mutually beneficial in order to experience the full potential of buyer-supplier relationship management systems.
Improving Strategic Partnerships with Liferay
Today’s manufacturers need modern digital experiences to meet both customer and distributor expectations. With an already competitive and complex market, manufacturers need frictionless solutions that make partner relationships simple and effective.
Liferay’s digital commerce platform is built specifically with complex B2B platforms in mind. Businesses can automate manual processes, scale revenue growth, and get support for even the most complex B2B business models.
Are you ready to begin? Now more than ever, digital transformation is imperative for B2B manufacturers. The whitepaper, Developing a Digital Customer Strategy for B2B, offers a step-by-step guide and checklist to help businesses create a digital strategy. While manufacturing business models can be complex, this guide explores how digital transformation can be achievable with the right tools and solutions.