Has Your Organization Set Up a Supplier Development Program?

Categories : Procurement Stages | Identify Suppliers Published on : Mar 09 2018

By: ProcurementIQ Staff Writer, Ashley McKay

We all know how important it is to develop strong relationships within procurement, but how many of us are actually doing it? Yes, we know building relationships with internal stakeholders can be challenging and some departments are still working towards this. However, are you also putting the same effort into strengthening relationships with your vendors? It’s critical that procurement gets to know their vendors. After all, any shifts in their business can directly affect yours.

In an article, “A Supplier Development Program Might Be the Secret Sauce Your Business Needs,” Sam Jenks (of Kodiak Rating) states that “relationship management between buyer and supplier is crucial to the success rate of a partnership, and both parties must learn to give and take to create fair/shared value.” He compares the collaboration between supplier and buyer with potty training a child. It’s something that will take time and effort. It requires “patience and perseverance.”

Sam also highlights 3 key areas of focus for organizations planning to implement a supplier development program:

  • Preparation: Reviewing the status of a supplier relationship is crucial when structuring a SDP.

  • Communication: The communication of wants/needs by a buyer, to a supplier, is crucial for the success of a supplier development program.

  • Training: To avoid lapses in buyer-supplier trust, making the extra effort [to train suppliers on strategies they can use to help meet your organizations goals] as a buyer shows a sense of engagement. 

But, What are The Benefits?

Sam names a few, including increased efficiency and production and reduced costs. According to ProcurementIQ Writer Savannah George, “If you think about it, every interaction you have with a supplier has an associated cost. So, time is money and you may be spending too much of it on the suppliers that hold the least value to your organization.” While these are only a couple reasons why your organization should set up a program (if you haven’t already) that will help you better manage your vendors, it is vital for procurement. The time is now! Get to know your vendor and weed out any that might not be providing enough value. Minimizing your supplier base will also allow you to better manage those relationships.

For additional insight and to read more about the benefits, read the full article here.


To learn more about supplier relationship management, read
"How Well Do You Know Your Suppliers?"

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