Collaboration Increases Share of Wallet
In a tight economy, new accounts can be increasingly difficult to secure, even in emerging markets. As a result, suppliers are increasingly targeting their sales efforts to existing customers and can only succeed if they add value above and beyond their competitors. While price is important, competing on price alone often leads to fickle customers who, a year after of doing business with you, will leave to find cheaper pastures.
The best supply chains have buyer-supplier relationships that are based on value and consistent delivery of this value. That value can be based on services, quality, on-time deliveries, returns management, or some combination of these. It’s what makes buyers increase their percentage of purchases from individual suppliers for the long run. This provides a double-edged benefit for suppliers: when a buyer increases its purchase of a needed material from 45 percent to 60 percent, this not only enhances the chosen supplier’s bottom line, but also negatively impacts the competition. Further, this increased collaboration between supply chain buyer and seller leads to another valuable outcome: increased efficiencies.