Mastering Supplier Relationship Management in the Juicing Business

Supplier relationship management (SRM) is so much more than procurement, contracts, supply, and demand. It’s a strategic method of mitigating risk by creating mutually beneficial partnerships with your vendors. Partnerships you can rely on as you establish and grow your juicing business.

Let’s dive into how to build and maintain strong and lasting supply chain partnerships.

What is meant by supplier relationship management?

Managing your supplier relationships goes beyond the initial procurement process. It’s a strategic means of creating collaborative and transparent long-term partnerships.

Your suppliers include all vendors you rely on to stock, clean, and operate your business. However, it’s not just about what you need. Like any successful relationship, the relationship should meet your needs and theirs.

You procure the products and services you require at a price that ensures quality. Your supplier gains a committed customer whose business they can rely on. It’s a win-win!

This includes both nationwide suppliers that cater to the food industry, and small, local, and multi-industry suppliers.

What types of suppliers do juicing businesses require?

Your juice business is likely to require:

• Sysco or similar for smallwares, cleaning supplies, and more.
• Cintas or similar for cleaning floor mats, towels, aprons, and more.
• Nationwide, regional, and local-area food suppliers.
• Paper and plastic goods suppliers to serve your juices.
• Suppliers that provide uniforms and custom merchandise.
• Restaurant appliance and equipment maintenance providers.

What are the 5 key points of SRM?

The 5 key points of SRM are: strategize, segment, implement, collaborate, and monitor.

• Strategize: Determine what products and services are required to bring the vision for your juicing business to life. This should include your estimated order volume or service frequency.
• Segment: Categorize your suppliers by the types of products or services they provide. Many restaurant suppliers provide a variety of solutions to meet a range of your needs.
• Implement: Now that your plan is in place, determine who is responsible for what. Utilize your team’s unique strengths to delegate procurement tasks.
• Collaborate: The most successful relationships are ones that prioritize communication,transparency, and a sincere desire to see one another succeed.
• Monitor: Once your service or delivery schedule is live, keep a close eye. Visually inspect for quality when relevant. Utilize data and analytics to identify trends. Ensure you’re maintaining your contractual obligations.

What are the 4 types of supplier relationships?

There are more than 4 types of supplier relationships, but let’s explore the 4 you’re most likely to encounter in your juicing business. The top 4 are: arms-length, partnerships, Just in Time (JIT), and buyer-supplier networks.

#1 Arm’s-length

Arm’s length suppliers require little to no sourcing, procurement, or supply chain operations management. No contract is required, as their products or services are one-off or as needed. However, you may benefit from setting up a business account with some arms-length suppliers. For example, you may have a business account with Office Depot to access discount pricing and an expanded product catalog.

Arm’s-length suppliers include the items you purchase online, on Amazon, seasonal decorations, electronics, and technology.

#2 Partnerships

Partnerships are the long-term contracts you commit to. You invest in these products or services on a weekly or monthly basis, as they are the core vendors you rely on for efficient operations. Maintaining healthy vendor relationships with your contractual partners is of top priority.

These partners will leverage their internal data to forecast your inventory and seasonal needs. However, communication and transparency are a two-way street. Keep them apprised of upcoming events and other factors that may impact your product or service needs.

#3 Just in Time (JIT)

In the food industry, JIT suppliers often fall into both the partnership and JIT supplier category. JIT items require perfectly-timed delivery. For example, the fresh produce for your juice has an expiration date, making them JIT.

While they don’t expire, you’re also likely to rely on JIT suppliers for dry goods such as your disposable juice cups, straws, and lids. These items are delivered in large boxes that take up a significant amount of space. If you’re like most restaurants, space is a commodity so you can’t stock much more than you need for a couple of weeks.

Properly managing your JIT vendors requires accurate forecasting to reduce your waste, and your supplier’s waste. This aspect of inventory management is crucial for maintaining a healthy operating profit margin.

#4 Buyer-supplier network

Buyer-supplier networks are collaborative networks that encourage supply chain efficiency and resilience. It’s the process of sharing in-depth analytics, preferences, technology, and best practices. This identifies trends providing benefits for everyone in the network.

If your business is part of a franchise, you might be part of a regional network with other franchise partners. If you aren’t part of a franchise, you might be part of a restaurant, juice, or health food network.

What are the 4 C’s of supplier relationships?

The 4 C’s of supplier relationships are communication, completeness, collaboration, and convenience. Learning the 4C’s will help you establish, build, and maintain strong and healthy vendor relationships.

#1 Communication

The first step in the procurement process is clearly outlining what you need. At the same time, prospective suppliers outline how they can meet your needs. Also, how they can’t meet your needs.

Communication must be ongoing. Even if things are running smoothly, regularly touch base with your vendors.

#2 Completeness

Some refer to this “C” as commitment, as it’s a commitment you make to and with your vendors. It’s easy to think that you’re the customer, so it’s their job to serve you. But remember, this is a partnership.

On your end, you must:

• Order on time.
• Pay your invoices on time.
• Proactively communicate changes to product or service needs.
• Remain friendly, professional, and respectful.

#3 Collaboration

Also referred to as coordination, you and your suppliers must work together to ensure you provide one another with what you need to succeed.

This includes determining:

• Where in the juice bar will food and dry goods be dropped off?
• What days of the week do you need delivery?
• What hours should they come?
• How will holidays affect your delivery or service schedule?
• How will they communicate if they’re running behind?
• What if you need an out-of-cycle delivery or additional services?
• Do they need keys to your restaurant for after-hours delivery or services?
  What are the consequences if vendors don’t meet their contractual obligations?
• What are the consequences if you don’t meet your contractual obligations?

#4 Convenience

Also referred to as capacity, you must constantly work with your suppliers to ensure you have the right tools and technology to work together effectively. This is centered heavily around leveraging technology to optimize and automate your joint business processes. This might mean utilizing their inventory software or at least integrating with their technology.

Here’s to prosperous SRM

The supplier relationship management strategies above not only reduce risk for you and your vendors but also optimize your supply chain operations. This ensures you deliver the quality required to see your juicing business thrive!

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