Decideware

I would like to thank John McCleland from ADR International for his insights around supplier relatationships, particularly in helping me understand why you should be very clear about what type of relationship you want from an agency or supplier.

Which path should you follow?

• Strategic Relationships
• Competitive Relationships

The term Strategic Relationship is just so 'super-sexy'! Don't you almost feel compelled that this is what you want all relationships to be like?

What John helped me understand is that it all depends on how much value you can get out of the relationship, and how much effort and 'flex' each party is prepared to give.

Be clear that maintaining a strategic relationship management program takes effort and cost, so you had better be sure that you are going to get a good return on your efforts.

Some key questions

• Is your relationship predominantly price driven?
• Can you get the goods or service easily elsewhere?
• Have you squeezed out all the immediate costs?
• Are you prepared to invest time and effort in managing the relationship?
• Is the agency/supplier willing (and able) to make adjustments based on your feedback?
• What extra value can you get from having a deeper relationship with the agency/supplier?

Cost and Value

In summary if your relationship is predominantly cost based, with little value "upside", then it is probably not worth the effort in building a strategic relationship process with that supplier.

On the other hand if value is the driver, and it is difficult to switch suppliers, then it may well be worth going down the strategic relationship path.

Author: Richard Benyon (with thanks to John McCleland)