14th July 2022
The importance of strong supply chain relationships
Any business that sells products knows that supply chains can make a huge difference to the company’s revenue, cash flow and ability to service customer orders on time. When things go well in the electronics supply chain then it’s all good, with everyone receiving the parts, components or products that they need, leaving them with the time required to get things out of the door for customers. However, as everyone knows, there are global supply chain problems at the moment affecting every industry, including electronics.
Unfortunately, there is no magical solution to the supply chain issues being experienced in manufacturing and other sectors, as the various factors that are having an impact are all still ongoing situations that haven’t been resolved as yet. However, that doesn’t mean that there is nothing that can be done in your business to help try and make things run a little more smoothly and take a bit of the pressure off that is being caused by a flawed supply chain.
With delays, price increases and margins that are ever-more squeezed, the relationships that you have with suppliers of essential components and products has never been more important to the success of your business.
How can strong supply chain relationships benefit businesses?
There are several different benefits if you have strong supply chain relationships, which include:
Cost reductions
There can be a couple of ways in which having established and positive supply chain relationships can reduce your costs. There are often costs associated with setting up new deals with new suppliers that simply aren’t an expense if the relationship is always there. Additionally, many suppliers have some wiggle-room on cost and are much more likely to cut you a better deal if you are a repeat customer and your relationship is strong. This can give you access to savings that simply aren’t available to customers that have no real relationship with the supplier.
Better efficiency
Once you have been dealing with the same supplier for a while and have formed a good relationship, they understand things about your business that they learn over time and your two-way communications also evolve positively. This means that they can get to know your usual timings, frequency of orders and other needs and your relationship will mean they are motivated to pre-empt problems or delays and give you a heads-up before issues develop into real problems. For example, a supplier who knows that access to a certain component is going to be restricted in a certain timeframe is likely to prioritise their trusted and valued customers (you!) when it comes to availability and give you as much notice as possible of future potential wait times.
Price certainty
One thing that every business and household has been affected by in recent times is rising prices in most aspects of life and work. If you have a strong relationship with your supply chain, that usually puts you in a great position to agree fixed costs, bulk discounts and other price-related terms that can help you plan ahead and give your own business more certainty when it comes to your outgoings and projected cash flow.
Operational improvements
As your supply chain relationships progress and communication improves between you, it facilitates the exchange of feedback and ideas that can benefit all sides. Your supplier may be able to negotiate a better deal at the start of the chain if you are able to tweak a small part of your ordering process, for example, or you may be able to benefit from them giving you priority access to alternative products or components or other deals that can result in changes to your own manufacturing processes.
Taking advantage of EP4’s strong supply chain relationships
Building these strong supply chain relationships can take time and significant investment over the years, which isn’t necessarily something available to your business right now, when there are pressures in every direction.
The good news is that here at EP4, we’ve been building and maintaining great positive relationships with the full manufacturing supply chain for decades and can offer the benefits of this to our own customers. We specialise in hard-to-find and discontinued components, as well as helping all customers to fulfil their regular orders too. We already have the relationships in place, through many years of working together, to get our customers the best possible deals and speed of delivery, which can make all the difference to your bottom line. Get in touch with us today to discuss how we can help you.
