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August 10, 2022

Peter Foxhoven Gives Insight into Misunderstandings with Suppliers and How to Avoid them

Suppliers play a crucial role in many businesses by providing raw materials to be turned into products for sale or manufacturing and shipping ready-made items for sale. Problems that arise in the business-supplier relationships can have a substantial negative impact on companies that may face shortages and financial loss. However, as Peter Foxhoven explains, many of these problems can be traced back to misunderstandings due to a lack of clear communication. He offers insight into how to avoid issues while strengthening the overall business-supplier relationship.

First, Peter Foxhoven explains that a business needs to ensure suppliers are kept up to date on business plans and strategies. If, for instance, a business owner is considering releasing a new product next year, a supplier should know about it to ensure a steady supply of this product in inventory. Conversely, a company that plans on pulling an item from stock should ensure the supplier knows about it as soon as the decision is made. Keeping a supplier "in the loop" turns the supplier into a business partner. Both parties work together to ensure that each has the information needed to make decisions that are in both parties' best interests.

It's also wise to identify the best way to communicate with each other. Regular in-person contact is always in order, as it allows each party to get to know the other and establish clear lines of communication. At the same time, both parties should have an agreed-upon method of communication in order to ensure important information isn't lost or misunderstood. Email can be ideal for this, although some suppliers may prefer phone calls or text messages. Be adaptable to communicate with suppliers in their preferred manner to ensure they receive your messages clearly and in a timely manner.

Peter Foxhoven emphasizes that it's important to focus on finding answers to problems rather than placing blame when issues arise. Once the problem is solved, a business can evaluate what went wrong, why it went wrong, and, if need be, find a new supplier. However, in a crisis, it's best to focus communications on the best way to find a workable solution to the issue at hand.

A strong business-supplier relationship can have a substantial positive impact on a business. As Peter Foxhoven points out, recent statistics show that Nissan, FCA USA, Ford (News - Alert), and General Motors could have boosted their collective profit by a whopping $2 billion had they cultivated a good supplier-business relationship in the way that Toyota and Honda (News - Alert) have done. The UK report found that supplier problems in the country cost businesses more than £10,000 a year. While some suppliers are arguably more professional and competent than others, many problems can be avoided by having a clear line of communication, making expectations clear, and listening carefully to what the supplier has to say.  Building strong relationships with suppliers can spell the difference between a vibrant business that has what it needs to be successful and one that struggles to find what it needs in order to meet consumer expectations.

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