The Complete Guide to Enterprise Supplier Development Best Practices for a Long-term Partnership
Introduction: What do you need to know about Enterprise Supplier Development?
Every big business started as a small business, Richard Branson said “A big business starts small”. Google started in a garage. Apple was started by Steve Wozniak and Steve Jobs in a garage too on 1st April 1976. Today Apple On 3rd January 2021 became the first US company to reach a $3 Trillion Market Cap. Every small business has potential to become a billion dollar company, but not without support and assistance from bigger players in the industry.
This is why we have Enterprise Supplier Development (ESD) and in this article, we will discuss the Enterprise Supplier Development Best Practices for a long-term partnership. We will answer the question, how can big business help small businesses and entrepreneurs running their businesses from a garage to develop in to a formidable profit generating machine.
Developing a supplier can also be a great way for big businesses to increase their profitability, as well as giving the supplier the opportunity to grow and expand. These new suppliers are often small businesses and developing them can cultivate an ecosystem of successful small businesses, hence developing the economy further and increasing jobs.
The key concept of enterprise supplier development is building long-term relationships with future partners. The process starts with discovering and researching the best suppliers in the world. Next, you need to establish a connection with them and build trust in order to get access to their products and services at the best prices possible.
The Best practices for Enterprise Supplier Development (ESD) are:
- Getting the right partners (suppliers and small businesses)
- Building a Strong Supplier Management Strategy
- Tracking supplier progress and growth over time
How to Get the Right Partners?
One of the most important things to focus on is the relationship between enterprise and its suppliers. The supplier development process should be based on a combination of collaboration, partnership, and trust.
1. Evaluate where you are now: Take a closer look at your current supply chain and see where it is lacking or inefficient.
2. Connect with suppliers: Don't just go searching for suppliers; leverage your network to connect with them.
3. Create win-win partnerships: Seek out partners that can provide best value for both parties - not just one person winning at the expense of the other person's success.
4. Support long-term relationships: Build strong relationships with your supply
How to Build a Strong Supply Management Strategy?
In order for this strategy to be successful, companies need to have a strong relationship with their suppliers from start to finish. Whether a company is looking for new suppliers or trying to maintain their current ones, there are many ways they can improve their relationships.
When dealing with small businesses specifically in a development program, one of the major decisions an organisation must make is:
- Will the business manage Enterprise Supplier Development in-house, or will they contract it out to experienced ESD service providers?
- How will the business maintain the information provided by the suppliers, to ensure consistent monitoring and growth
Once that decision that been made, then the organisation must pay close attention to the following points:
- Developing shared values with suppliers
- Regular training and guidance
- Developing an organisational culture that is supportive towards small business development
- Allowing small businesses to make mistakes
- Developing a clear direction on the type of businesses to support that are in-line with the supply needs of the organisation
- Choosing the right business management team
- Financial investment in to the suppliers businesses to help them grow
Businesses must understand, that the success of the suppliers will directly lead to their success, promoting competition in the industry, innovation and job creation will directly benefit the larger organisation financially. The direct financial investment in to small businesses will also yield higher than market value returns upon their success.
Tracking supplier progress and growth over time - in Enterprise Supplier Development (ESD)
This is arguably one of the most important best practice for Enterprise Supplier Development, the ability to track progress and review the growth. Depending on how big your organisation is and the number of supplier, this can be an impossible task.
It is much easier to just throw money at Enterprise Supplier Development, instead of spending the time to really focus on developing small businesses.
Small businesses require:
- Tools and systems
Skhokho Enterprise Supplier Development (ESD) tool for monitoring and supporting small business with Business Software tools and systems:
This is where the Skhokho Business Management Software comes in, read more about the Sponsor App, specifically created for Small Business Development, within the use case of Enterprise Supplier Development.
With the Skhokho ESD App, you can do the following
- Allow your ESD partners to operate like a professional business, with world class Business Management Software that is already integrated.
- Only have one software to manage, as opposed to multiple fragmented software tools for different parts of the business.
- The accounting and billing is streamlined in one place for all your suppliers.
- You have direct access to their performance reports in all the different parts of the business from HR reports to accounting reports, at anytime, directly from your dashboard.
To get started with Skhokho Business Management Software for Enterprise Supplier Development, reach out to us on hello[at]skhokho.io for a personalised demo of the software and what you can achieve.