We all have expectations, right?

Things that we need to keep ourselves satisfied. 

For businesses? 

The situation changes and it's all about necessary things to keep operations running.

Suppliers are one of those

Ideally, before starting working with a supplier, you have defined criteria aligned with your business’s goals and signed a contract with all the important details written down.

But…situations change and at some point, you might find that one of your suppliers isn't responding as expected.

What's a business or procurement leader to do?

Start working on a supplier development program.

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What's Supplier Development?

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Everyone can improve 

That's the spirit, and with supplier development, this idea works to closely collaborate with your suppliers so they can improve their performance levels.

As a buyer you don't limit yourself to only carrying out transactions but rather work to build stronger and more reliable partnerships.

Doing this allows you to:

• Improve the quality of the products your business gets.
• Maintain consistency.
• Reduce lead times and dangerous supply chain risks.
• Promote innovation.
• Find cost savings opportunities.
• Create long-term relationships.

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Supplier development might require setting up training programs,  technology sharing, process improvements and in some cases, even provide financial support. 

The goal?

Build a win-win situation where your business benefits from better supplier performance and your suppliers grow to be more competitive.

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Why Should Your Business Care About Supplier Development?

So supplier development is about giving your suppliers a boost in their performance?

Yes, but that's not all

In the process, you're also strengthening your whole supply chain. 

When you work with suppliers that are meeting your expectations, your business can benefit from higher quality products and fewer disruptions 

Let's take a look at why supplier development should be one of your priorities.

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It reduces risks

We live in a changing world, that's a fact, and the more we grow as a society, the more unexpected things can happen.

From climate change-related disasters to financial crises, businesses know that there has to be a strong degree of resilience in their operations 

So yes, if your company relies on a truly capable supplier base you are directly protecting yourself from being affected by any potential issues.

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Cost savings 

Isn't it a great feeling when you find that you can save some money in your processes?

Well, that's another huge advantage of supplier development 

Improved efficiency and open collaboration mean lower production costs.

Competitive advantage 

The market is though 

We all know that 

Especially if you are only starting.

Suppliers that innovate and improve are key to having access to better technologies and overall processes.

Stronger relationships 

People love it when they're supported.

Your suppliers are not the exception. If they see your company is dedicated to building a long-term partnership with them by supporting their continuous growth you will benefit from a scenario that's profitable for everyone.

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How to Set Supplier Development Goals?

Start with metrics 

How can you know that something is working if you can't measure its progress?

Implementing supplier development strategies is a wonderful idea but first?

You need to identify the most critical areas where you think improvements are needed.

It could be something like: 

• Product quality 
• Delivery times 
• Costs 
• Compliance 
• Sustainability 

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Use relevant data to establish baseline performance and set clear benchmarks to measure success.

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Define who your most important suppliers are

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Suppliers are important, we all know that.

But…

Not every supplier represents the same for your company or needs the same level of development.

Focus on those that have the biggest impact on your operations, maybe it's because they provide you with important components or because they present the highest risks.

Prioritizing helps you allocate your efforts accordingly 

Be realistic

Making positive changes is a good target but to make things work you've to be realistic. 

Work with your suppliers to set milestones that are actually achievable. Push for growth, but be sure to not be overwhelming. Consider their capacity, resources and willingness to invest in improvements.

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Monitor progress 

Supplier development is in your best interest, right?

So it's up to you to keep an eye on how things are going.

Regular check-ins, performance reviews and data tracking are fundamental to stay on course.

Use scorecard audits or metrics to analyse progress and change strategies if needed.

Encourage collaboration

Supplier development should be a two-way effort. Engage suppliers in discussions about mutual goals, provide necessary training or resources, and create a culture of continuous improvement. Strong collaboration leads to better results and long-term success.

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Best Tools for Supplier Development 

To successfully develop your suppliers, you need the right tools and techniques to assess performance, improve collaboration, and drive efficiency. With the right approach, you can identify weak spots, implement meaningful improvements, and build stronger partnerships that benefit both sides.

Utilize supplier performance audits

Carrying out supplier performance audits might seem like an additional workload but they are one of the best ways to obtain a clear picture of how well your suppliers are meeting expectations. Tracking key factors like quality, delivery times, compliance, and cost efficiency, allows you to pinpoint areas that need improvement and take action.

• Set up constant evaluations using scorecards and KPIs so you always have reliable data.
• Compare supplier performance against your industry standards and business goals.
• Give constructive feedback and work together on action plans that are really relevant. 
• Focus on continuous improvement, not just compliance, help your suppliers get better, not just meet the minimum requirements.

Effective communication

Strong communication is key to making any relationship work. So why not communicate with your suppliers? When you’re clear about expectations and keep the conversation open, it’s easier to align goals and build trust.

• Schedule check-ins to discuss progress, challenges, and opportunities.
• Use digital platforms so it’s simpler to exchange updates, feedback, and important data in real-time.
• Create a culture of transparency, and welcome your suppliers to speak up about issues or ideas.
• Make communication a two-way street. Instead of just giving orders, collaborate to find solutions that work for both of you.

Technology, technology, and more technology 

The right technology can make supplier development more effective. By working with digital tools, you can streamline processes, track performance, and create a more efficient supply chain.

• Use supplier management software to keep all performance data in one place and automate tracking.
• Implement digital procurement tools to improve transparency and collaboration with your suppliers.
• Use AI  analytics to predict risks, spot inefficiencies, and optimize processes.
• Encourage your suppliers to adopt digital solutions that help them improve their operations and meet your expectations more effectively.

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A Checklist to Overcome Supplier Development Blockers 

Lack of supplier buy-in

• From the very beginning take the time to clearly explain the benefits of development for the supplier, not just for your business.
• Provide real-world examples of what it means for them to improve their performance.
• Involve suppliers when you are establishing your main goals so they feel like partners.
• You can also, depending on your company size,  offer incentives like long-term contracts or preferred supplier status for those who improve.

Limited supplier resources

• Assess what’s realistic based on the actual supplier’s size and capacity.
• Provide training, this could be in the form of a simple conversation or a more elaborated training program like online courses. 
• Connect suppliers with external resources like industry workshops or technology solutions, this will allow them to be updated with all the changes in your market. 
• Break development goals into smaller, manageable steps to make progress easier.

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Really poor performance

•  Reevaluate expectations and truly take the time to see if they’re realistic for the supplier.
•  Review past performance data to identify recurring weak points.
•  Have an open conversation with your supplier about challenges and barriers.
•  If after all of this, you see that performance doesn’t improve, consider reducing reliance on the supplier or finding alternatives.

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How to Develop a Training Program for Supplier Development

If you want your suppliers to perform better, you need to give them the right tools and knowledge. A strong training program helps them improve skills, adopt better processes, and meet your expectations more easily. The goal is to make training practical, engaging, and tailored to what your suppliers actually need.

Identify needs

Start by figuring out where your suppliers need the most support. You can look at performance data, ask for their feedback, and identify common challenges. 

Are they struggling with quality control? Compliance? Logistics? Once you know the gaps, you can build training that actually makes a difference.

Customize training

We learn in different ways, right?

And the truth is that not all suppliers are the same, so a one-size-fits-all approach won’t work. Some may need technical training, while others might need help with improving communication or efficiency. Break it down so each supplier gets training that’s relevant to their role in your supply chain.

Choose the right method

Some suppliers learn best through hands-on experience, while others prefer online courses or in-person workshops. Offer a mix, think of: videos, live training sessions, and real-world demonstrations.to make learning as effective as possible. Keep it flexible so suppliers can fit it into their schedules.

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