A strong relationship between buyers and suppliers is absolutely crucial for the health of both businesses, yet they're not always the easiest relationships to manage. Buyers may be reliant on the prompt delivery of an order for the sake of the rest of the supply chain, whilst suppliers will want to be paid a fair price for their services. An exchange of the two should be an easy enough negotiation, but this isn't always the case.
Dishonesty from either - or both - parties can have a negative impact on business relations and sour the waters for future opportunities. Here's why honesty is always the best policy between buyers and suppliers:
Honesty Leads to Longer-Term Relationships:
It goes without saying that longer-term relationships are beneficial all round
Establishing a new business relationship is always a risk for both parties. Buyers want to leave their project in the hands of a supplier who will offer a quality service and adhere to agreed deadlines, while suppliers want to know that they will be paid promptly once they've completed the work. Therefore, it goes without saying that longer-term relationships are beneficial all round, and honesty is a huge factor in the longevity of such a partnership.
Suppliers should be completely transparent with their customers about achievable lead times, while buyers should be upfront about the prices they expect to pay from the start. That way, both parties are aware of the other's expectations, which paves the way for a successful long-term relationship that satisfies the business needs of everyone involved.
Honesty Helps to Improve Reputation:
There's no quicker way to tarnish your reputation than to make promises you cannot keep.
The power of word-of-mouth within the engineering and manufacturing industry cannot be understated, owing to the complexity and extent of manufacturing supply chains. With the rise of online reviews, we're now more connected than ever, meaning that mistakes may not be that easy to forget. There's no quicker way to tarnish your reputation than to make promises you cannot keep, which may mean that other companies become reluctant to work with you in the future.
If you're upfront about your limitations and a buyer or supplier agrees to work with you on that basis, then they cannot be disappointed. However, it's a different matter entirely when you over-promise to win the work or secure a supplier, only to then back down on what was originally agreed. These sorts of mistakes can come back to bite you at a later time, which is why it's so important to be transparent from the start.
Honesty Helps to Manage Expectations:
You don't want to risk your reputation over a single job, or end up working at a loss.
High expectations can occur from both sides of the business relationship, but are especially rife amongst purchasers. Some buyers may be looking for a lead time which is unachievable, or to pay so little that the supplier would be working at a loss. It's absolutely crucial that suppliers manage these expectations to avoid disagreements at a later stage and to make sure that the business relationship is a worthwhile venture for them to get into.
Honesty allows you to manage expectations and open the buyer's eyes to what is realistically achievable within a project. If this is not met well and you fail to win the work, then it may be a blessing in disguise. After all, you don't want to risk your reputation over a single job, or work at a loss in the hope that it may lead to larger orders in future.
Honesty Allows You to Commit With Confidence:
Transparency is the absolute foundation of a strong buyer-supplier relationship.
Opening up an honest dialogue with your customer or supplier will ensure that you know all of the facts before committing to the relationship. If you're unsure as to whether a delivery date is set in stone, or how long it will take for you to get paid for your services, then it's difficult to know whether or not the relationship is a good fit for your business. By gathering all of the facts initially, you can be confident that you're not getting into something which may not be what it initially appears.
Transparency is the absolute foundation of a strong buyer-supplier relationship and chances are that the other party will appreciate an honest conversation just as much as you do. Establishing the facts will allow both of you to move forward on a good footing and hopefully lead to a long-term relationship that complements your business.