Supply chain planning: Establish more profitable supply chain relationships

Sam Phipps

Last updated: April 17, 2023
Sam Phipps

Now is the time to really reflect on relationships (or lack of…). When it comes to supplier management, the same applies! After all, when better to review your supply chain relations than now!

However, clutching on to a bad relationship can cause great heartache. Likewise ineffective supply chain partnerships can prove extremely costly for your business. So how can you end the supply chain partnerships holding you back in order to establish more profitable bonds with the suppliers that count?

The true cost of poor supplier management and supply chain planning

Supply Chain Planning 1Although it is often difficult to put an exact figure to it, research from the Chartered Institute of Purchasing and Supply highlights that the potential costs benifits to adopting more effective supply chain planning tactics could be “enormous!” Ultimately, your ability to satisfy the expectations of your customers is heavily influenced by the performance of your suppliers.

With this in mind, the importance of effective supplier management is clear. However, when you are focused on making a relationship work, it is easy to lose sight of how a bad relationship is really affecting your operation. Put simply, how much are you having to invest in inventory in order to compensate for your supplier’s poor performance?


Take for instance the following scenarios:

  • The minimum order quantity is seemingly non-negotiable
  • Your supplier’s lead times are excessive and your order always seems a low priority
  • What your supplier actually delivers deviates from the supplier delivery agreement

In all of these scenarios, you have no choice but to order either additional cover stock or safety stock. After all, unless you protect your supply chain with additional inventory, your ability to service the needs of your customers could be seriously hampered. However, can you justify investing invaluable working capital into inventory?

Optimise your approach to supplier management

To help you adopt more collaborative supplier management strategies, our inventory management experts have outlined a supply chain planning guide. To help you take control of your supply chain relationships, this simple 4-step guide explores 4 key areas to help you cut unnecessary investment in stock. The result:  more profitable relationships with your supply chain partners.

Ultimately, through taking these proactive steps to improve the performance of your suppliers, you can begin to establish more effective supply chain partnerships.

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