UK supplier relationships increasingly mutually beneficial, research finds
Research from Barclaycard Commercial Payments has highlighted the changing dynamic between UK buyers and suppliers, and highlights some of the top ways for businesses to further strengthen their supplier relationships.
The value senior procurement leaders place on supplier relationships has changed significantly over the past five years, with nearly three-quarters (73%) of procurement leaders saying their supplier relationships are now more mutually beneficial than they used to be, and a similar proportion (76%) say they now communicate more openly with suppliers about business strategy.
The data reveals that the length of supplier relationships is also changing. Seven in ten (69%) procurement leaders say they are now looking for longer-term supplier relationships than five years ago, with six in ten (59%) saying that their supplier contracts last at least two years.
Almost half (48%) of procurement teams contact preferred suppliers at least once a week. However, when looking at how procurement professionals could improve their supplier relationships, the number one response was for businesses and suppliers to ensure they understand each other’s strategic priorities (32%).
The research found that six in ten (61%) businesses are more concerned about paying suppliers on time than they were five years ago, which could be as a response to increasing pressure from government to pay smaller suppliers within their agreed payment terms.
Procurement leaders are also more concerned about the reputational damage caused by poor supplier management, with 65% saying that they are now more concerned about the public perception of how their company treats suppliers.
Respondents said that they currently pay suppliers on schedule 73% of the time, on average. When asked why they might not meet the agreed payment terms, three in ten (30%) cited slow internal processes as one of the main reasons. The same proportion (30%) said that they would like to simplify their procurement processes to ensure suppliers are paid more quickly, in order to improve supplier relationships.