Improving Relationships

Cooperation or Competition?

If you want your suppliers to perform better, teach them how, says Norbert J. Ore, director of purchasing for Sonoco Products Co. in Hartsville South Carolina.

"Suppliers can be a much greater asset than we've allowed them to be in the past," says Ore. "If you don't make suppliers an integral part of your business, you run the risk of not staying competitive." He offer these tips for a mutually productive relationship:

* Encourage honest communication. "Create an environment where both parties can talk openly about cost, service and product issues," Ore says. Tell suppliers you welcome their input because they may know something you don't. For example, perhaps changing your delivery schedule could result in substantial savings.

* Be generous with information. Educate supplier about the various aspects of your business, including the challenges you're facing and what your customers' expectations are.

* Learn about your suppliers. "I spend time with suppliers, learning about their business, what their strategy is, what direction they're going, and how I fit in as a customer," Ore says.

* Look for opportunities to jointly use the latest technology. Whether you communicate via the Internet or modem, share database or use bar codes, the key is to take advantage of available technology to improve your mutual efficiency.

* Bring your people together: Send the staffers who are working with the products to tour the supplier's facilities, and invite their counterparts to visit you. "Recognize that people are involved in all the [stages], and people work better when they understand the whole process they're part of," Ore says.

* Include suppliers in your in-house training. It may be appropriate to invite suppliers to participate in some internal training sessions; when they know what you're teaching your employees, they will know how to deliver what you need to meet your objectives. Suppliers may even be willing to help out with the costs.

Before opening your internal operations, Ore says, it's a good idea to ask suppliers to sign confidentiality agreements. Used in the same context as employment agreements, such contracts can create feelings of mutual commitment. And just as training builds loyalty among employees because it makes them feel valued, Ore says you'll find the same applies to suppliers.

"You have to decide whether you want a cooperative or a competitive atmosphere," says Ore. "A competitive atmosphere assumes that if I win, you lose. A cooperative atmosphere assumes that we both could win."