The Do's and Don'ts of Dental Procurement Supplier Relationship Management

September 7, 2021

Get a personalized demo that suits your practice's needs
Tell us a bit about yourself, and one of our product experts will get in touch
We're committed to your privacy at Method. By clicking on Request a Demo, I agree to the Privacy Policy

Supplier Relationship Management (SRM) is one of the largest differentiators between purchasing and procurement and can significantly impact your dental practice’s success. SRM is, in big part, about collaborating with preferred and strategic suppliers and nurturing mutually beneficial relationships that support organizational growth.Although we understand employees are stretched and time is limited, when it comes to SRM, a little effort goes a long way in motivating suppliers and arming them with what they need to fight for your business.

Dental Procurement SRM Do’s

Managing your supplier relationships isn’t a one-time task and takes a consistent and concerted effort. However, it’s a process with the potential to extract significant value, and it’s worthy of your time, so let’s make sure you do it right.

Dental Procurement Do's and Dont's

Assign an Owner

In order to ensure you keep your suppliers accountable and avoid communicating conflicting information, assign one person as captain of your SRM efforts. Communication with the supplier should be streamlined through the relationship owner as much as possible, with predetermined backups for when they aren’t available. This avoids redundancy while ensuring the supplier receives a singular version of the truth, avoiding confusion or misunderstandings.Management should work with the SRM owner to ensure you are aligned on strategy and objectives.

Open Lines of Communication

You want to kick off or reignite relationships with preferred and strategic suppliers by opening the lines of communication. Invite them in, shake their hand, tell them what there is to know about your dental practice. Share your wins and your losses. Let them know what you’re struggling with and what your long term objectives are. Open and honest communication is the first step in building a foundation of trust.It’s also a good idea that they establish who their critical connections are and that they do the same for you. Your accounts payables and receivables departments should have the proper contacts and anyone who backs up the purchaser when they aren’t available. Effective two-way communication at every level of the business is key to successful long-term partnerships.

Express Your Expectations Clearly

If you want to hold suppliers accountable for their actions, you must first ensure clear communication of your requirements. Think both big and small, and include what may seem obvious such as standards of service (deliver on time) as well essential details such as what door they should deliver to, between what hours, and to whose attention.You’ll also want to ensure you bring to their attention any processes they will be expected to follow (such as Methods cloud-based dental supply RFQ process), or if you would like them to come in for a quarterly review armed with delivery performance data.

Build Trust

Trust is an integral part of any relationship, and SRM is no different. Build trust through transparency, honesty, and follow-through. Salespeople are people too, and their success and livelihood depend on the trust they put into your company.

  • Do as you say, say as you do
  • Visibly recognize their efforts.
  • Award business where the business is earned
  • If you make commitments, make sure you stick to them. If, for whatever reason, you can’t, communicate the underlying issues as quickly and as clearly as possible and
  • Proactively address issues and challenges open and honestly.
  • Always behave ethically

Listen to Your Supplier’s Needs

Mutually beneficial relationships stand the test of time and draw healthier outcomes. Your supplier’s ability to meet your demands and bring you their best service and pricing relies on collaborative efforts. Set your suppliers up for success by making sure the conversation is a two-way street. Listen and be responsive to their concerns, and whenever possible, meet your supplier’s needs and do what they ask of you.

Set Objectives

Whether it’s cost savings initiatives, lowering inventory levels, or implementing a new request for quote (RFQ) procedure, suppliers should take an active role in your improvement objectives. Have a progression strategy and set clear targets and action plans to progress them along the preferred and strategic vendor growth path.Collaborate with suppliers to establish KPIs and a monitoring plan. Remember to keep it real and set realistic objectives with a clear action plan.

Ensure Supplier Progression

Suppliers who continually work hard to gain your business should be rewarded in kind. Whether formal or informal, a progression strategy should be set in place and communicated to suppliers. If your procurement practices to date have been mostly transactional, you should have a plan to strive to select tactical, preferred, and strategic vendors. This is an ongoing process as suppliers may gain and lose favor depending on performance.Be honest. Let your suppliers know where they stand, where you think they can get to, and how.

Perform Periodical Reviews

The ultimate goal should be a formalized, quantified, and data-driven supplier performance evaluation using standardized metrics and a vendor scorecard system. In actuality, however, those sorts of processes may be a long time away. The important thing is to communicate issues in a timely manner and periodically set a time for an informal discussion to review both service and pricing performance.You should be ready to discuss pricing competitiveness, order delivery, invoicing issues, response time, and frequency of contact. Discussions should end on a positive note and with a clear improvement plan.Remember, don’t be afraid to say the hard things. Your suppliers can’t fix what they don’t know is broken, clearly communicating issues and giving them a fair chance to do better before they lose business is fair game, and they will appreciate your efforts.We can’t lie; being proactive in managing your supplier relationships can take considerable effort, but passive procurement that lacks strategy can be a costly habit. Put in the time and the action, and your dental practices EBITDA will thank you for it.

The Don'ts of Dental Procurement Supplier Relationship Management

supplier relationship management

Once upon a time, purchasing was thought to be about little more than “beating up” suppliers and playing hardball to knock down prices. And although it would be fair to say that some of this still happens, procurement today is more inclined to take a more mindful, long term thinking approach. Open, honest, mutually respectful, and beneficial relationships make for more fruitful business partnerships.Just like in a marriage, in supplier relationship management (SRM,) what you don’t do can be just as important as what you do do. It’s important to remember that paying close attention to your procurement practices improves your dental practices bottom line.So let’s dive into the most crucial things you want to make sure to avoid.

Dental Procurement SRM Don’ts

Don’t disregard the ethics of procurement at any time.

Maintain objectivity and integrity and abide by fair play with no preferential treatment or acceptance of bribes.

Don’t disrespect your suppliers or downplay their importance.

With such a large market base, it may feel like suppliers are a dime a dozen, but like the right life partner, a good supplier is hard to find and should be valued.

Don’t allow suppliers to take advantage.

The lack of best practices within the dental procurement industry has left the door open for suppliers to take advantage of. Ensure you understand the importance of the three-way match and have a discussion with your suppliers if problems arise.

Don’t ignore SRM due to lack of time.

Do what you can, and you’ll be surprised how little effort it takes and how quickly you’ll see results that should lighten your workload and calm your woes while improving your profitability.

Don’t let service failures or warning signs go undealt with.

Set the standard of what your organization is and isn’t willing to accept by being vigilant and dealing with issues head-on when they arise. Whether they are a transactional or strategic supplier, you must hold them accountable if you want to see improvements.

Don’t be unfair in your criticisms.

Ensure they are fact-based and not based on unconfirmed hearsay.

Don’t forget to give your suppliers a chance to surprise you.

Instead of always approaching suppliers with specific requests, ask them to show you what they can do for you and others aren’t doing. Remember, even small improvements add up to considerable savings in the course of a year. Whether they improve your payment terms or waive shipping fees, if they want the volumes that others aren’t getting, they should be willing to do what others aren’t doing.

Don’t expect suppliers to read your mind or flip a switch overnight.

Communicate any new or upcoming changes to your preferred suppliers as clearly and soon as possible and give them some time to get their ducks in a row.

Don’t be overly aggressive in your objectives.

Long-lasting and effective change takes time to implement. Be realistic in your goal setting, and don’t let the fact that you may be tight on time or resources detour you from getting started. Doing something is always better than doing nothing, and you may be surprised how far a few quick, open, and honest discussions can go.Your business isn’t any suppliers given right, and competition is healthy for maintaining long-term cost savings and improvements. Don’t allow strategic suppliers to remain in that position indefinitely. Strategic suppliers should set the bar for other suppliers trying to gain your business and continually work to maintain and deserve your business through superior service and pricing.To develop a cost-reducing competitive environment, and get the most out of your suppliers, ensure to shake things up once in a while, and allow new prospects to show you what they’ve got.

Use Method to Simplify Dental Procurement

Although it may seem like a long list of “do’s” you don’t have time for and “don’ts” you fear you’ll forget, the key to improvements is always keeping it real with small incremental improvements over time. Our Client Success team is here, at the ready, willing to do our part in helping you establish your processes, educate employees, and improve your ways of working. So let us know where we can help.Contact us today to schedule a free demo or ask any questions you have!

Learn More About Dental Procurement

Ready to build a better dental practice?

Method Procurement Technologies gives independent dental practices and DSOs the inventory management and procurement capabilities they need to succeed. With our full, end-to-end solution, ordering dental supplies is straightforward and hassle-free.

Learn how Method Procurement's spend management solutions can improve your bottom line. Get in touch with our team today or request a demo to see it for yourself.