In this Executive Insight, Holly Taylor shares her practical approach to building resilient, value driven supplier partnerships. With a clear emphasis on communication, governance, and getting the basics right, she explores the key elements of strong SRM. From handling conflict and driving innovation, to embedding diversity and inclusion throughout the supply chain. Holly’s insights reflect a leadership style grounded in transparency, accountability, and purposeful collaboration.
What are the key factors you focus on to build strong relationships with suppliers?
Building and maintaining strong supplier relationships is fundamental to achieving core outcomes. A key element is establishing transparent communication channels to build trust, align on deliverables, and encourage collaboration, with the ultimate goal of forming a true partnership. Communication should be a mix of both formal and informal mechanisms. Formal governance should focus on key issues, risks, performance, and pipeline, while the benefits of informal mechanisms should never be overlooked. I’m a big believer in the simplicity of picking up the phone, saying thank you when a supplier goes above and beyond, being direct when the answer is simply no, and continually seeking feedback.
It’s also important to get the basics right: pay the supplier on time, explain clearly when something isn’t working and what can be improved, and operate on a no surprises basis.
Being clear on business objectives and how the supplier partnership contributes to achieving those outcomes is also key to building a sustainable relationship.
Finally, it is imperative to have an appropriately resourced team that is skilled, engaged, delivery focused, and understands the importance of supplier relationships.
How do you handle conflicts or issues that arise in supplier relationships?
The reality is that conflicts or issues are often inevitable in supplier relationships, particularly when these relationships are underpinned by contractual mechanisms. When managing a dispute, it’s important to understand each other’s perspectives. A supplier might be driven by dollars, while the customer may require a product to be delivered within a specific timeframe or to a certain quality. Listening, communicating, and identifying where positions differ, and then working to find common ground, is key. This may involve thinking outside the box in terms of how the partnership is structured and re setting the relationship if needed.
Jointly establishing timeframes and clear escalation paths to resolve the issue is important, as it ensures small concerns don’t escalate into bigger, unmanageable problems.
However, by far the best way to manage disputes is to prevent them in the first place. This can be achieved by conducting proper due diligence as part of the sourcing strategy, setting clear expectations, ensuring contracts are reasonable and include dispute resolution terms, and defining realistic, achievable performance targets that are consistently monitored.
How do you measure the performance and success of your supplier partnerships?
Essentially, the performance and success of a supplier partnership should be measured by the supplier’s contribution to delivering the organisation’s strategic objectives. This ties back to the start of the relationship, transparently communicating those strategic objectives and ensuring that deliverables are underpinned by agreed performance metrics. For example, I’ve led supplier engagements where we structured contracts to incentivise suppliers to help us achieve our goal of being first to market or capturing greater market share. This positioned the supplier as a key partner in delivering our objectives and significantly strengthened our ability to succeed together.
It’s also imperative to have the right governance, tools, and technology in place to regularly measure and monitor performance, identify risks, gather feedback, and explore opportunities for improved collaboration. Undertaking supplier segmentation is also beneficial in identifying and managing vendor risks and opportunities, and in aligning performance monitoring to the appropriate level.
Finally, it’s important to remember that reduced cost shouldn’t always be the primary success metric. I’ve worked on countless engagements where spend was relatively low, but the associated risk was high, these are suppliers who, if mismanaged, can halt your operations. Supplier relationships need to account for and actively manage those types of risks.
How do you encourage suppliers to contribute to innovation and value creation?
The ability to create value, innovate, and evolve is core to any organisation. In a true supplier partnership model, value creation is often the very reason the supplier was engaged, so it’s fundamental that they are part of this process. Communication channels with the right representatives should be dedicated to forward thinking, strategic activities and treated as a highly beneficial and necessary part of the partnership. The supplier is often the expert, so as customers, we need to treat them as such. They frequently bring innovative concepts, insights, and ideas from other markets or geographies, which can be incredibly valuable.
Commercial arrangements should foster win win outcomes that support innovation and value creation. For example, a supplier may gain positive media exposure or financial benefits when helping a customer deliver a higher quality product or service.
That said, I cannot stress enough the importance of getting the basics right before embarking on value creation initiatives. Too often, suppliers have approached me with innovative ideas to add value, yet they are still struggling to meet the basic contracted requirements. As with any relationship, you must master walking before you attempt to sprint.
How do you approach supplier diversity and inclusion in your SRM strategy?
Supplier diversity and inclusion is key to any successful SRM strategy. Leveraging more diverse suppliers can unlock innovative opportunities, create resilience, and improve productivity. More importantly, there is an ethical and broader economic benefit, engaging diverse suppliers contributes to wealth creation, improved health, education, and greater equality.
There are practical mechanisms that can be implemented, such as including diversity as part of procurement evaluation criteria, setting clear targets, and ensuring that suppliers also embrace diversity throughout the broader supply chain.
There is also value in undertaking targeted programs to encourage greater diversity. I’ve led supplier initiatives focused on regional organisations and Aboriginal and Indigenous vendors. These programs helped us better understand our customers, introduced niche services in previously untapped markets, and more broadly contributed to job creation and education opportunities.
Progress should be measured, for example, by tracking the number of diverse suppliers engaged, total spend, and ongoing improvements. Engaging with not for profits or local organisations with relevant expertise can be incredibly beneficial, as can ensuring you have dedicated team members with the necessary knowledge to lead and drive this strategy effectively.
