Help your suppliers build a better business strategy

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ShawnTheunissen.jpgTo maximise your supplier’s potential growth, they must have a plan. In fact, more than a plan – they must have a strategy that will give them the best options for growth and success. In this month’s SmartProcurement, Shawn Theunissen, head of CSR at Growthpoint Properties and the founder of Property Point, suggests some tough questions that you must put to your suppliers to create their working strategies.


In order to grow a supplier that can operate at optimum efficiency, the supplier needs to decide the direction they’d like to move in and plan for all aspects of business growth. A strategic plan is a key element in any business and ensures you, your supplier and their staff have a ‘map to success’.


This is not to say that the strategy cannot be flexible – in fact, in today’s fast-changing business world, it must be flexible. However, the basic strategy should give them a solid platform from which to work.


To assist a supplier to create a strategic plan, ask them the following questions:


Where is your business now?
This should include market share; profitability; debts; customer service (note all complaints and accolades); and operational effectiveness. Ask your supplier to look at their business with a critical eye to get the answers that will drive better business success. Understand that it may be hard to do as their business is their “baby”, but it is the best way to identify areas that need improvement.


Where do you want your business to be?
This requires the supplier to set goals, on paper, for the next two years, five years and 10 years. They must provide everything, from their mission statement to their vision for the company, including their core focus and how to maintain that. Remember that newer businesses that stick to what they’re good at can always expand into other areas when they have the financial wherewithal and experience to do so. Broadening their focus could be a five-year strategy, rather than a two-year goal.


How will you achieve these goals?
Your supplier must identify their current strengths and what they need to change to strengthen other areas of their business. For example, if their manufacturing department is doing well but customers are complaining about non-delivery, then they need to examine their distribution or customer service departments.


Include the following in this section:
• Existing growth figures
• Acquisitions (current or future possibilities)
• Diversification
• Change management and implementation
• Increasing expenditure to achieve goals


Remember that this is not the supplier’s business plan; rather it is a strategy for further growth. It needs to be realistic and achievable and must be based on facts a well as potential opportunities that may arise from implementing new strategies in certain areas.


For example, part of a strategy that ensures the sustainability and growth of the supplier would be to enrol in a business incubator programme that can provide not only overall expert advice and assistance, but will also guide them in understanding how the private sector operates and how to build relationships with key people in large organisations.


A good programme will introduce them to networking opportunities with key people in the procurement and supply chain arenas to enable them to discuss their offerings with the right people, the first time round. Time saving is paramount to a small business, so encourage the supplier to keep a list of who they should be seeing to avoid the ‘shotgun approach’, which can see them visiting a large company several times before they reach the correct decision maker.


Finally, once your supplier has a strategic plan on paper your colleagues, as supply chain professionals, should review it to ensure the plan is attainable and manageable within the parameters of the supplier’s financing and budget. The supplier too must ask a trusted business-minded friend or colleague to review it.


Contact Property Point for more information on regarding its supplier development programmes.
 

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