HOW TO MANAGE YOUR SUPPLIERS AND CONTRACTORS EFFECTIVELY
When you are running a company that uses contractors and external suppliers, you need to make sure that you are managing them effectively. Occasionally, problems can arise, and you need to be ready to face them. Find out more about how to do this below.
Benefits Of Using Contractors
There are many benefits to using external resources like suppliers and contractors in a business. More businesses are realising this and are changing the way that they operate. As long as supplier relationship management takes place, businesses can benefit from expert services, lower costs and increased agility. You can also use contractors for their specialist skills while giving yourself more time to focus on the core business activities which you know you are good at.
Next, we are going to discuss some of the things that you need to focus on when managing these external resources.
When you are using contractors or external suppliers, you need to be able to manage them in a dynamic way. This requires a different type of leadership skills that you might need to work on. Improved leadership will help you to manage this effectively, but remember it’s a relationship, so you need to be able to take advice from suppliers as well as pass out instruction. The best leaders will always be willing to change and adapt to situations, even those which are identified and presented from outside your organisation.
Does your business have clear processes that are easy to follow? You need to make sure that everything is explained carefully to outside contractors to keep the business running smoothly. A key point to remember, when you write processes, they need to be understood by those that may not currently do the job and they should be simple to follow and implement. There is no use in having fantastic complex processes that people don’t understand, as they simply won’t be implemented or used. Many businesses these days consider adopting processes and practices that align with International Standards, such as ISO 9001 for Quality Management. These include supplier management and relationship, amongst other things and will provide you with a framework.
Risk assessment and management should be something which you are actively doing throughout your entire business. This is especially important when working with external resources to avoid any serious threats to your intellectual property, people, assets or your business processes. Effective supplier relationship management requires vital education on how your business operates and assessing your business risks regularly, including those imported in to the business from supplier is vital.
Using external resources can be cost-effective but only if you control your costs effectively. Think about how much you can afford to spend on these things and manage your budget accordingly. Consider how much this would cost you to undertake internally, ensuring to include all costs associated, plus management that may be involved.
Your HR policies might need to be adapted to accommodate the external staff that you are making use of. Think about how they differ from staff on your payroll, but don’t forget that if they are involved in higher risk activities for your business, you will need to take a level of responsibility to ensure the safety of them and others working around them.
If you are using external resources, then you need to have strict KPIs and SLA’s to ensure performance is managed effectively. Not only should you record the performance, but you should analyse it also, ensuring that areas for improvement are documented and driven through improvement plans with suppliers. But don’t forget that this should be a relationship, so the improvements could very much be on your side as much as the suppliers.
The final thing that you need to focus on is making sure that you have the right tools to make this work. Consider adding software that allows you to share knowledge and encourages collaboration for the best possible result.
Make sure to focus on these key areas if you want to make the most of any external resources that your company utilises.