You don’t have to be a big company or sell fancy widgets to have a supply chain. Most small businesses rely on some other company or person for product or services critical to the delivery of their own product or service. As we begin to establish these vendor relationships, we typically allow them to tell us about how good their product or service is and sooner or later, choose a new business partner. This new vendor, can affect your ability to service your own customers, so the questions becomes; Will your supply chain fail your business?
There are a number of ways to help know your supply chain better. First, when a vendor asks you for your financials or to fill out an application, ask them to do the same. Your supply chains financial viability is just as important as your own and its fair for you to know that you can rely on your vendors to be responsible businesses and people who hold themselves to the same standards they are holding you to.
Second, get a basic understanding of your vendors supply chain. There is a limit to this but if your vendor relies on a third party to complete their responsibilities to your company, its fair to ask them to explain how that third party affects your relationship if that party fails to deliver.
Third, establish a clear line of communication between your company and your vendors, that details the terms of your business relationship and keep that line of communication open. Make it clear that you expect open communication and that you rely on them to meet or exceed their terms, just as they expect you to do when it comes time to order the services or pay for them.
Finally, do all you can to avoid allowing anyone in your supply chain to dictate your service or product quality. Establish your parameters before ever using the vendor and develop a way to objectively measure the performance of the relationship that can be shared with each vendor.
Your supply chain is your business partner. Knowing your vendors and setting up the relationship correctly from the start and maintaining that relationship based on the specification and terms agreed to, will minimize the possibility that your supply chain will fail you.