The Value of Building Trusted Partnerships Across Your Supply Chain - Apr 2019

Few shippers can handle end-to-end supply chain activities all on their own. Materials must be sourced. Products must be designed, prototyped, and tested. Then they will be manufactured, shipped, and sold. Returns must be handled and processed. If one link in the supply chain should fail, the entire process could potentially fail with it. That’s why it’s important to work only with trusted suppliers, contractors, and logistics providers that value your business as much as you do. 

Long-Term Supplier Relationships

If you view the supply chain as an actual chain, suppliers would make up the first few links. Suppliers provide raw materials, which go on to manufacturers and machine shops who are also suppliers. The materials will be fabricated into a range of parts or components before being passed on to links further down the chain – and so on and so on – until final products are created and ready to be sold. 

There are many advantages to building long-term, mutually beneficial relationships with your suppliers. The recent U.S. steel tariffs provide a fine example of the importance of such relationships. When prices hike and material availability becomes rare, it’s preferred customers who will get the first chance to purchase them. As prices for steel continue to rise and American steel production capacity is stretched to the limit, many small and medium manufacturers have been left struggling to source the materials they need. That passes on down the chain, leaving end manufacturers in a lurch as well. 

Yet, it’s likely that certain loyal customers are still getting first option on the materials they need from American steel producers because they respected the partnership when American steel was struggling to compete with foreign imports. 

To build a long-term supplier relationship, focus on the following five areas of B2B relationship building: 

  1. Trust. Don’t lie to your supplier or try to swindle them to get a better rate on materials or parts. If you’re honest with them, they’ll be honest with you. 
  1. Value. Respect your supplier’s bottom line as much as you respect your own, and understand that true value is more than just a price point. Real partners know that price is only one factor of value, and that customer service and quality drive continued business. 
  1. Flexibility. Be agile in your demands and be patient, making allowances for delays when capacity is tight. If your supplier can’t deliver, it’s likely as frustrating for them as it is for you. 
  1. Strategy. Don’t be reactive, but instead plan ahead carefully to give your suppliers optimal time to fulfill your orders. 
  1. Communication. Establish effective two-way communication so your supplier knows when you’re in a bind, and so they feel comfortable letting you know when they face challenges as well. Building a firm understanding of each other’s operations and capabilities will help you navigate shifting market demands. 

Using a Trusted 3PL

The aforementioned five areas can also be used to build and define your relationship with your third-party logistics (3PL) provider. While suppliers and logistics partners may serve different functions, building trust between business partners still operates on the same principles. You’ll get as much out of your logistics partnership as you put into it. 

By establishing a long-term partnership with a 3PL you trust, you will reap the benefits when transportation capacity is tight, when you’re struggling to find warehouse space, and potentially even when your suppliers are tapped out. 3PLs are built on relationships, and they can leverage their network of trusted partners to get you what you need—even when it seems impossible to do so. 

For example, let’s say you haven’t yet become a preferred shipper with any of the trucking carriers you use. Now that freight capacity in trucking lanes is suddenly at a premium, you may be struggling to move your shipments on time, or to move them at all. 

However, a trusted 3PL works regularly with a wide range of carriers across all modes, and specializes in getting your cargo to its destination. If you’ve been working with a 3PL for a long time and have developed an interdependent relationship based on trust, respect, and communication, then that 3PL will go above and beyond to help you move your product in a timely manner. Your business is their business as well, which means your success is also theirs. 

Learn More From WSI Logistics

WSI Logistics has been a trusted 3PL provider to shippers across a wide range of industries since our inception in 1966. We offer a comprehensive range of warehousing and transportation services to suit the needs of partners across the most challenging industries, including retail, electronics, chemical, consumer packaged goods, paper, packaging, building materials, building materials, and more. We put our trust in our customers, and they trust us in return to store, distribute, and transport their goods on time, every time. 

To learn more about WSI Logistics and how we can be a trusted 3PL for your operation, follow our blog and follow us on Twitter.