Benefits of long-term relationships in the supply chain

30Oct

posted by: Andy Billingham, EMKA (UK) Ltd

(Image: Shutterstock)

The modern manufacturing industry was formally introduced to the concept of trust with Just in Time, Kanban and other defined protocols – and we found that it worked. If we were able to trust the supply chain, then massive benefits ensued. This has led, in turn, to ways of working that allow us to address other issues; for example, quality and price stability.

The growth of the internet has put trust front and centre. We are used to paying in advance for the goods we buy online, trusting that they will arrive as described – doll’s house furniture aside!

Historically, trust and long-term relationships have been at the heart of trading – from nomadic days to the Silk Road and the clipper ships with tea and porcelain from the East. With months-long deliveries and remote communications to manage, it was difficult enough to find a good supplier (or a good customer), so it was advantageous to develop such a relationship – especially in difficult times, when resources were low and best spent on finding or serving customers.

In modern times, we relearn this lesson each time we experience a recession, whatever the cause. When we are stressed in our business, we need to rely on our long-term relationships. This is why, in our industry, we refer to people as “partners” in an informal sense. There is a popular saying in the financial field that “past performance is no guarantee of future returns”. However, the problem is that, very often, past performance is all we have and can allow us to develop the confidence needed to progress our business. It can help us to recover from setbacks and expand again, knowing that our suppliers have got our back.

Read the full article in the November issue of PBSI