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The better your supply-chain relationships, the better your productivity.

Too many companies view their supply chains as cost centres. The name of the game is keeping overheads down. It’s a stressful situation for everyone involved, with no value system in place for either party.

Smarter companies understand their supply chain can help suppliers become more agile, contributing to their productivity instead of viewing them as overhead. Most companies know this, yet for some reason, many don’t do anything about it. (we ought to attribute this idea to someone)

The key is to strengthen their relationships with their supply chains, creating a more collaborative dynamic. Currently, the picture is not pretty.

According to Raconteur, 81% of businesses experienced at least one disruption in their supply chain in 2014. In 2015, Raconteur reported that the reasons ranged from ‘ethics incidents’ to new laws or regulations. In a U.S. survey, 75% of businesses said they did not have full visibility of their supply chain.

Yet the stronger the relationship, the more likely supply chains are to offer that transparency, giving access to valuable information. Manufacturers who cultivate beneficial relationships are also quick to get their compliance when new regulations affect their industry.

Innovation is another boost to productivity. Most businesses consider their supply chains as their number-one source for innovation, and with good reason. A strong relationship facilitates innovation-driven procurement. Businesses with weak supply-chain relationships will find themselves left behind in the innovation race, their productivity suffering even more.

‘Fully linked collaboration’ yields big results. In a 2015 2degrees survey, 94% of supply chain businesses felt “We have good levels of trust with our customers” as opposed to 41% of supply companies in traditional relationships with their customers.

Strengthening your relationships won’t happen overnight. Start with clear communication. Get together to solve problems. Adapt best practice for your procedures so that you reduce inconsistencies across all areas. This produces a big boost to productivity, saving time and money.

Delayed cash flow was another cause of disruption in supply chains, according to Raconteur. Pay on time.

Prioritise. Work with your supply chain to determine what matters most to customers and shareholders, and go from there. Hint: always think of what adds value to the end result. You and your supply chain should be of one mind on this.

There are more ways to strengthen your relationships, of course, but you get the picture. We really are all in this together.

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