Supplier development and competitiveness of the company

Can the development of suppliers influence growth of the company’s competitiveness?

The ever more dynamic and competitive market, forces companies to change quickly and frequently innovate. Few entrepreneurs are aware that their source of inspiration and impulses for development, may be suppliers. Even a smaller group mastered the art of developing suppliers in order to increase the competitiveness of their own company.

Businesses tend to focus on the development of competence in purchasing their own companies – training staff, improving processes, building a technological advantage, and other development activities. Meanwhile, suppliers have a huge innovation potential that can be used to further improve procurement processes and reduce costs throughout the organization, and investing in the development of this potential can have a huge impact on the company’s financial results. After all, you can venture to say that to a large extent a company is only as good as its suppliers.

What is the development of suppliers?

Supplier development can be defined as a process of individual buyer’s cooperation with a particular provider aimed at improving the efficiency of suppliers, resulting in benefits for both parties. However, it is extremely important that it is initiated and then led by the purchaser, whose mission is to help suppliers through the use of its own resources, experience and knowledge.

Development cooperation with suppliers may take the form of ad-hoc measures or take the form of strategic programs.

The most common areas that are covered by the program development vendors are:

• Reduction of purchase costs while maintaining the supplier’s margin.
• Increasing the quality of delivered materials, goods or services.
• Increasing quality in the area of timely deliveries.

However, an important advantage of vendor development programs is that the areas covered by them can be tailored to the specific business needs of the buyer. This makes it possible to achieve well-defined goals with high impact on market competitiveness.

That’s why it is worth investing in the development of suppliers. We know how to do it and we are happy to support our clients in this area as well.