//Why are good supply chain relationships so important?

Businesses have been forced to respond to a host of supply chain crises over the last couple of years. Firstly, the Covid-19 pandemic caused congestion at ports around the world, and now the war in Ukraine is having its own impact on trade supply.

This has drastically affected prices for raw materials, and thus construction costs. Year-on-year prices for all building work rose by 21% between February 2021 and February 2022.

As a response to the current trade materials crisis, the CLC has advised builders to work closely with their suppliers and communicate early to avoid delays. However, this doesn’t mean that strong relationships with suppliers aren’t always important.

Companies should be continually reviewing their relationships and evaluating how they can build stronger trade supply relationships.

Let’s look at some of the benefits of establishing good trade supply relationships.

//Responding to a crisis

When crisis situations arise–such as the Covid-19 pandemic, or the war in Ukraine–strong trade supply relationships are important.

For example, there are expected to be severe shortages of some building materials this year, especially timber and bricks. Inevitably, this will lead to delays in businesses receiving supplies and potentially receiving unpredictable quantities of materials.

To effectively respond to these crises, it’s vital that businesses can communicate effectively with their suppliers. Businesses that already have close relationships with their suppliers will find it easier to anticipate supply chain pressures, increasing flexibility in their supply chains and allowing them to more easily respond to future challenges.

At Pinewood we have successfully navigated the supply chain issues of the past few years and always managed to hit customer dates, due to our strong relationships with our supply chain.

//Getting the right price

By building strong relationships with suppliers, you can also benefit from more consistency. At a time when the cost of raw building materials is rising, reaching a 40-year high, assured costs is one of the most valuable benefits of a strong trade supply relationship.

Manageable prices are one benefit of building a long-lasting supplier relationship. As you show loyalty to a few key suppliers, you’re also likely to get better value for money. In the end, lower costs across the board will mean you’re in a better position to survive periods of financial uncertainty.

//Increasing efficiency

Not only do strong supply trade relationships help you navigate during a crisis, but they will also improve the overall efficiency of your business. By building strong relationships with your suppliers, communication between client and supplier becomes more streamlined. This makes changes to programme easier to incorporate and addressing any issues that arise more straight forward.

Open and honest communication and close relationships with your suppliers can also allow you and your supplier to adapt to each other, discover the most efficient way to work together and, ultimately, lead to greater efficiency.