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The Importance of Supplier Relationships

By Joe Morelli

January 23, 2020

Could your company use a few hundred thousand dollars, or possibly even millions of dollars, to put toward your bottom line? No, I’m not selling some type of pyramid scheme—just hear me out.

What if I told you that if you communicated better with suppliers, trusted them more, and worked more closely with them to reduce costs, you could save your company this kind of money? This is exactly what the North American Automotive OEM-Supplier Working Relations Index® Study did this past year, and for the first time, dollar figures were attached to the study. The study’s author, John Henke, used a formula to determine the value of supply chain management after interviewing hundreds of suppliers in several areas related to communication, help, trust, and other factors. The results in the auto industry were staggering.

If Ford’s score had increased as much as Toyota’s and Honda’s, the Dearborn, Mich., automaker would have added more than $354 million to its bottom line. Fiat Chrysler Automobiles (FCA) would have earned an additional $661 million, and General Motors (GM) would have earned more than $750 million.

At Huston Patterson, we have dozens of active vendors whom we rely on day in and day out to help us succeed. We place tremendous value on their services, which can be best represented by the Vendor of the Year award we give out each year. Now, of course, the numbers related to the Big Three automakers are much greater than ours at Huston Patterson; however, the principles of supply chain management and vendor relationships are the same, which ultimately has led to a better bottom line for us.

In my experience, if we as business owners want to reach the high goals we have set for our companies, great supply chain management and improving our vendor relationships are essential. GM, Ford, and FCA lost the opportunity for millions—will you?

AICC has a network of nearly 200 Associate members who proudly provide the general membership with services, equipment, and materials that help businesses such as yours succeed. Each one of us is eager to engage, build trust, and work together to find solutions to your biggest issues. In addition to offering the expertise in our particular discipline, we often have our fingers on the pulse of the corrugated industry, which can provide value well beyond normal transactional business.

The best Associates will engage and invest in your business in order to best understand how to help you succeed. Lean on these people. Let them in, and create a dialogue that challenges them to bring value. By doing so, I am confident you will find a group of people who are genuinely interested in your success, which will ultimately lead to results that positively impact your bottom line.

Joe Morelli is vice president of sales and marketing for Huston Patterson Printers and is vice chairman of AICC’s Associate board.

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