When was the last time you asked for feedback from your suppliers? Not many companies do – even though supplier relationships are one of the cornerstones of a successful manufacturing business.
At Jakamo, we conducted a study among Finnish suppliers working with manufacturing companies to highlight the importance of supplier experience and to gain insights for our own development. Our goal is to enable better supplier experiences and partnerships for all companies using Jakamo.
Supplier experience can be defined as the subjective perception of how well expectations between the supplier and customer are met. It is holistic in nature and considers various aspects of collaboration: supply chain sustainability, future visibility and open governance, operational transparency and automation, emerging ecosystems, new technology, and overall collaboration and interaction.
In this post, we present some key findings from our study, based on interviews with 16 professionals from supplier companies.
Download the full version of the Supplier Study (in Finnish).
Partnerships or “partnership-washing”?
Partnership has been a buzzword in B2B relationships for decades, as well as a subject of academic research. Our research revealed that suppliers have noticed many of their customers talking about partnerships, and suppliers want to see themselves as partners to their customers. Suppliers view partnerships as including deeper collaboration, mutual trust, and transparency. Supply chain management literature suggests that in partnerships, the focus should be on long-term collaboration and quality, rather than just on direct costs. However, expectations regarding partnerships often don’t align with reality. In many cases, customer companies remain stuck in the “old ways” of transactional and hierarchical business relationships. The disconnect between expectations and reality may leave suppliers feeling like they are subject to mere “partnership-washing” rather than experiencing a genuine, collaborative relationship.
What factors build a positive supplier experience?
Suppliers highlighted several factors that contribute to a positive supplier experience, leading to better outcomes for both customers and suppliers:
- Broader organizational collaboration: If you are not involving suppliers in product or process development, you are missing out! Based on our discussions with industrial suppliers, customer organizations would greatly benefit from broader collaboration rather than just focusing on day-to-day transactions. When suppliers are brought into conversations early, particularly in the design and planning phases, they can contribute their expertise, resulting in better outcomes in terms of time, cost savings, and innovation.
- Professionalism, processes, and tools: The biggest factor impacting mutual success and the supplier’s ability to perform is having the right information at the right time. Suppliers find that efficient, standardized processes and the use of modern tools signal professionalism. They appreciate customers who have well-functioning systems in place, making it easier to collaborate effectively.
- Constructive communication and a positive attitude: Regular, transparent, and constructive communication fosters trust. Suppliers value interactions that are clear, professional, and respectful.
- Demonstrating appreciation: Suppliers seek validation that their contributions are valued. Acknowledging their work fosters goodwill and loyalty.
Suppliers often felt that their expertise was underutilized. For instance, it’s rare for suppliers to be involved during the early stages of a project, such as the planning and design phases. Lack of involvement means companies may miss out on valuable insights that could lead to better outcomes, such as time and material savings or reduced costs. Communication about future needs also makes it easier for suppliers to plan their business, resources, and production.
Suppliers feel that digital tools improve supplier experience when implemented correctly
One of the positive findings from the research is that suppliers generally have a favorable view of digital collaboration tools introduced by customers. These tools were seen as a way to strengthen established processes and ease daily interactions, such as order processing and communication. Suppliers expressed that these tools streamline workflows and improve the overall efficiency of operations with their customers – and, as mentioned, showcase professionalism.
However, suppliers mentioned some challenges related to digital tools, such as the number of different customer systems and user accounts, mismatches with their own processes, not being involved in development initiatives, and customers’ poor utilization of the systems they have implemented. We recommend considering these potential challenges when implementing digital processes within your supply chain organization!
Some suppliers have also invested in digitalization and automation of their own processes and prefer that customer systems offer ways to connect with supplier systems.
Questions to consider as a supply chain leader based on the supplier study
- Has your organization defined what “partnership” means to you and how it should translate into everyday actions?
- What kind of supplier groups do you have, and which suppliers should be considered as partners?
- What should the supplier experience look like for different supplier groups? For which suppliers is the goal simply to facilitate easy transactions, and for which should there be more strategic information sharing?
- Are you currently measuring supplier experience – if not, would it help you improve?
- Do you have a comprehensive understanding of your suppliers’ competencies and technologies?
- Additionally, are there ways to better leverage supplier expertise and remove current barriers to collaboration?
- How well are your basic processes with suppliers (orders, invoices, claims, RFQs, etc.) working from the supplier’s perspective? Do they receive sufficient information?
- Could digital tools help standardize and improve these processes?
- Additionally, could digital solutions enhance the supplier experience across the board?
Read more about Supplier Experience
Anni Kujala, Customer Success Manager
Riina Puhakka, Sales Executive
