Trust is a crucial element of any supplier relationship. While it can take time and planning to build a solid relationship with overseas suppliers, doing so makes it more likely that you'll increase business with them. It may even enable you to negotiate more favourable terms.

Build trust gradually

The key is to build the trading relationship slowly. Initially you should leave nothing to chance. Draw up written contracts that are clear and unambiguous.

Typically your initial contracts with a new supplier will be on a project-by-project or shipment-by-shipment basis. As the relationship develops you may move to longer contract periods and potentially be able to negotiate better terms.

An important part of building trust is learning how things work in your supplier's country. Are there important cultural and social differences, or differences in the way business is done?

Communication

Communication is an obvious potential obstacle when dealing with overseas suppliers. Even simple actions such as routine telephone calls can be complicated by factors such as time differences and low-quality phone connections.

In addition, there are potential language barriers. Which language will you use with your supplier? Do you have enough foreign-language speakers in your workforce? Do these employees have the skills they'll need to deal with your suppliers? Would it help to use local interpreters, especially for key meetings, to avoid misunderstandings?

Monitor, review and adapt

Make sure you monitor key aspects of the new supplier relationship. This will make it easy to identify areas for possible improvement.

 If there have been any problems, decide together how to resolve them. If everything has been working smoothly and profitably, you may want to extend the level of business you're doing together.

 

( liyy )01 Mar,2011

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