3 Ways Distributors Can Improve Vendor Communication and Collaboration

The supply chain has faced serious disruptions over the past couple of years. Harvard Business Review, however, notes the pandemic-era supply chain conditions “reflect a longstanding and fundamental shortcoming in how companies’ relationships with their product and component suppliers are structured.”

In other words, supply chain issues are nothing new.

One of the key challenges faced by distributors is supplier communication — or the lack thereof.

For example, when a product is backordered or otherwise delayed, vendors should alert distributors in a timely manner so that they, in turn, can update the customer or make other plans to fill that order. Without this communication, distributors risk harming customer relationships and may even need to find a new supplier, which can be frustrating and costly.

Other communication challenges between vendors and distributors include:

  • A lack of supply chain visibility means distributors are less adept at navigating product shortages, delays or underproduction.
  • As buyers continue to favor shopping online, many distributors have placed more emphasis on ecommerce to increase market share — but with increased sales comes additional challenges in managing inventory and adhering to vendors’ shipping requirements.
  • Many tech-savvy distributors prefer to communicate with suppliers on their own terms through digital channels, which may stunt proactive communication.
  • Vague responses from vendors, such as “The products you ordered will be packed and shipped as soon as possible,” are frustrating for distributors and impede transparency.
  • It’s common for departments or organizations to become siloed and only focus on their own workplace, leaving other key players out of the loop.

To maintain positive relationships with vendors, distributors need transparent communication and efficient ways to collaborate. Keep reading to discover our top three vendor communication best practices. Plus, learn about helpful technology and tools that make it simple to get over common hurdles.

How to Improve Communication in the Supply Chain

Use Technology to Your Advantage

Whether you’ve introduced the latest technology into your workflows or still rely on legacy software and emails, one of the best ways to improve communication with suppliers is to use a single application to collaborate.

The Vendor Portal in Microsoft Dynamics 365 Supply Chain Management is one such feature that allows distributors to seamlessly communicate with approved vendors regarding purchase order management, invoicing and more.

A major benefit of the Vendor Portal is that suppliers don’t need to have electronic data interchange (EDI) integration with Microsoft Dynamics 365 to utilize its features. Vendors can:

Despite the ease of use for suppliers, the vendor collaboration app puts you as the distributor in the driver’s seat. Distributors have full control over the information that vendors have access to when they respond to a purchase order, whether vendors can see pricing information, and other configurable security roles.

Additionally, with the Vendor Portal, not only can you communicate with suppliers in a frictionless environment — you’ll also have an audit trail of pricing contracts, order updates and other important notes and documents.

Set Clear Expectations

Even the most adaptive and proactive collaboration tools won’t be all that beneficial if vendors and distributors aren’t on the same page regarding how to use them. It’s critical for distributors to set clear expectations with suppliers upfront so that both parties are working in tandem to ensure transparency, efficiency and consistency. Communicate the data you need, and give them a platform through which they should provide it.

Say you commit to using the Microsoft Dynamics 365 Supply Chain Management Vendor Portal. In the implementation process, it’s essential to cultivate buy-in from your suppliers to ensure they actually log in and use it.

Whether you’re developing a relationship with a new supplier or trying to institute thoughtful process improvements with an existing vendor, set clear expectations from the start and hold suppliers accountable so you make the most of your collaboration tools.

Know Your Products

It’s not enough to have a general understanding of your products’ names and descriptions. To fully streamline and expedite communication with vendors, it’s important to know purchase order numbers, SKUs, order quantities and other data points you may need to reference in a pinch.

Of course, for a busy distribution manager, it’s unrealistic to be expected to remember thousands — or more — product specs and part numbers. Microsoft Dynamics 365 Supply Chain Management tools like the Vendor Portal work with your core Enterprise Resource Planning (ERP) functionality to make it easy to access important information when you need it.

Accessible product knowledge also comes in handy for distributors looking to add new goods to their catalogs. With a thorough understanding of the items currently being sold, distributors can identify potential supplementary products or other opportunities to expand inventory in a lucrative way.

To ensure distributors get the best deal when finding new products, they can send out a request for quotation through the Vendor Portal to various suppliers who will then respond back with pricing and other notable information.

Enable Better Supply Chain Communication with the Vendor Portal

The supply chain communication strategies discussed above are made possible with the Microsoft Dynamics 365 Supply Chain Management Vendor Portal, but this platform is just one piece of the supplier communication puzzle.

Reach out to Sikich today to learn how we can help your distribution business keep the world turning.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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