Improving supplier relationships is the key to better inventory control. Only 13% of businesses have a mature supplier relationship management system in place. Strategically improving supplier relationship management can generate 23%-46% more value for your company.

Strong supplier relationships often lead to better flexibility and reliability from suppliers. You’ll gain leverage to negotiate down minimum quantities and pricing while improving the level of service your suppliers provide. When suppliers like working with you, they may work to bring down their lead times and go above and beyond for your business.

Let’s talk about some tips for how to control inventory management with better supplier relationship management.

1. Evaluate Suppliers Before Partnering With Them

Before entering into a contract or business partnership with a supplier, check that they are a good fit for your business. Assess the risks and opportunities, and feel out whether the company and its personnel mesh culturally with you and your organization. Ask for references from other clients, and ask them and the supplier questions such as:

• How does the vendor handle emergencies?
• Is the company financially stable?
• Can the supplier consistently fill orders on time?
• What do their pricing and typical lead times look like?

Working with reliable suppliers that can meet your business needs can greatly improve your inventory control.

2. Communicate Clearly and Proactively

Being transparent with your suppliers is key to long-term partnerships. The more your supplier knows about your upcoming needs and expectations, the better prepared they will be. Here are some tips for effectively communicating with your suppliers:

• Keep your suppliers in the loop about your plans and strategies.
• Tell them when you predict increases or falls in demand, so they can prepare with appropriate inventory quantities.
• Keep communications short and to the point to keep your vendors updated while respecting their busy schedules.
• Foster a healthy, friendly relationship by thanking and praising suppliers for a job well done.
• Provide constructive feedback, and be honest about issues upfront.

3. Honor Your Contracts and Verbal Agreements

Start by creating a solid vendor contract that clearly defines all parties’ responsibilities. Negotiate a mutually beneficial agreement, and feel free to challenge clauses. Be open about your needs and expectations and listen to the supplier’s needs and expectations, too.

Once the contract is in place, honor your commitments. As the relationship progresses, act in good faith by following through on verbal agreements even when they aren’t in writing. Demonstrating your reliability improves trust with your business partners.

4. Pay Suppliers on Time

Managing cash flow is a delicate balancing act that’s just as critical for your suppliers as it is for you. Pay on time and in full for inventory that arrives on time and in full. When suppliers know they can trust you to pay by the due date, they’re more likely to treat you as a priority customer. They’ll be motivated to deliver orders on time.

5. Connect Suppliers With Your Inventory Management Solution

An excellent way to improve your supplier relationships is to integrate them with your inventory management software. It provides them with access to your real-time inventory data, helping them prepare for when your stock levels get low. It also speeds up the reordering process since you can auto-populate purchase orders using data from the latest supplier catalogs.

Finale Inventory offers powerful integration with SPS Commerce, an electronic data interchange solution that connects you with your suppliers. Our solution lets you send inventory advice, invoices and shipping notices directly to your suppliers. We also make it easy to store important information about your suppliers, so you can always maintain good communication.

Check out Finale Inventory for yourself with a free 14-day trial, or book a software demo to see how we can keep you connected with your strategic suppliers.