Supplier Relationship Management Podcast

During this podcast we explain how procurement and supply can be harnessed to help millions of Africans have access to the best care and treatment available. Mo is joined by Chukwudi, an expert in the procurement and supply cycle and will be sharing his insights and experiences. Discover what Supplier Relationship Management is and how is can help your business.

If you would prefer to review the transcript of the podcast, see below.

Intro:

Welcome to Health Procurement Africa and the Knowledge Hub. Our mission is to explain how procurement and supply can be harnessed to help millions of Africans have access to the best care and treatment available. Our insights and advice can help your business thrive by connecting with people, products and services you need on your procurement journey.

My name is Mpho and today I’m joined by Chukwudi, who is an expert in the procurement and supply cycle and will be sharing his insights and experiences with us. We want to find out what Supplier Relationship Management is and how it can help your business.

Mpho: Chukwudi, what do people mean when they talk about supplier relationship management?

Chukwdui: Procurement works best when there is a good relationship between the buyer and the seller. This relationship begins at an early stage, when the buyer begins to look for a company to provide the products or services they need. But supplier relationship management usually refers to the steps you can take to develop and maintain a positive relationship with your supplier once you have agreed to work together.

[expert continues with own experiences]

Mpho: What are the essential elements of supplier relationship management?

Chuckwudi: For me the priorities are regular communications, the sharing of information and treating the supplier as an equal partner. If you make a commitment to these you are more likely to have a relationship that is beneficial for both sides. As a result of this commitment and doing  what you say you are going to do it helps develop trust. It’s about keeping to your promises.

Mpho: Is this something you need to consider when you begin looking for suppliers?

Chuckwudi: Without a doubt. When it comes to choosing a supplier, it makes sense to find one with a good ‘cultural’ fit with your own organisation, as well as looking for value for money. This is to say, a company with the same values and priorities, with a similar approach to business. Afterall every business has its own organisational culture.

Mpho: Can contract negotiations have an impact?

Chukwdui: Yes, they can. In my experience it is very important for contract negotiations to take place in a positive atmosphere. This is when you can establish trust and build understanding between the two parties. If the seller feels the buyer is not being open and fair, even at this early stage, it will be more difficult to develop a strong relationship at a later stage.

Mpho: What should the main focus be for supplier relationship management?

Chukwdui: I think it is firstly about looking at how you can help the supplier to improve their performance in meeting the needs of your organisation, which will bring benefits to you. But this should be a two-way process. It may be necessary for you to make changes within your organisation to achieve this, such as adjusting your packaging specifications to help your supplier improve their efficiency and reduce cost.

Mpho: So, when you talk about ‘relationships’ here it is not just about people but also about physical infrastructure?

Chukwudi: Yes, it is important to understand that your organisation has an impact on your supplier’s business, and vice-versa. Supplier relationship management may also need to consider things like logistics, IT systems and the location of premises, for example.

However, you must not forget how important it is for people to be able to work comfortably together. A relationship is more difficult to manage without having mutual respect and, ideally, the people involved liking one another. If the relationship chemistry is wrong then the relationship is less likely to deliver the best outcomes.

Mpho: Not all suppliers are the same. How do you manage these different relationships?

Chukwdui: This is correct. Some suppliers are more critical to your organisation, and will probably need closer management. This includes those who provide high-value products or services than cannot be easily obtained from another company. Other suppliers may provide low-value products on a less frequent basis, and present less of a risk to your organisation. An example would be a supplier of medical consumables, disposable gloves and cleaning liquids.

Mpho: What are some features of suppliers who provide critical products?

Chukwudi: They are generally considered ‘strategic’ suppliers. These are the suppliers where you normally spend a high proportion of your total purchasing budget. You tend to work with them long term and the power relationship between you is normally quite balanced. It is sometimes called a win-win relationship.

Mpho: What if the relationship with strategic suppliers breaks down?

Chukwudi:  Well this can generate some significant difficulties for both parties.  Since they are a strategic supplier and important to you, it means that terminating this relationship can mean a shortage of supplies and other high level risks. It is likely that trying to find an alternative supplier would be very difficult and time consuming, so overall it is probably best to try and rebuild your relationship and try and work out your problems together.

Mpho: How does Health Procurement Africa help companies to understand and practice supplier relationship management?     

Chukwudi: HPA brings together a lot of knowledge and experience of procurement and supply. Working together to get procurement and supply right, we are also doing our best to ensure that patients get access to the healthcare they need and that the public sector secures value for money.

If you work in public healthcare procurement in Africa and are buying products or services on behalf of your organisation, this is the perfect community for you, where you can start learning, sharing and solving your procurement problems today.