What’s the one trait all successful suppliers share? They provide exactly what their client wants, and they do so when it’s needed.

There is never talk of substitution or making do. Companies rely on suppliers so that they can focus on their day-to-day operations. They can focus because they know that a supplier who understands their business needs is meeting them.

The definition of a supplier often has more to do with the legal and tax reporting requirements of state government (and sometimes federal or local government) than with a rigid one-definition-serves-all explanation. Most simply, when a business agrees to supply a product or service to another entity (business or individual), it becomes a supplier.

But in the realm of business structure and reporting across states, a supplier generally meets several criteria. It has inventory that it keeps in stock in an identifiable place (warehouse or store). It replenishes stock as it sells. In addition, a specified percentage of any sale (e.g., 40 percent or more in New York State) must come from inventory.

A supplier and a broker are fundamentally different operationally. A broker serves as an intermediary, working to link those buying with those manufacturing. A broker has no inventory or structural repository. Brokers facilitate exchanges. Suppliers hold, control, and sell goods.

The body of literature about suppliers—and supply relationship management (SRM)—is extensive. Top among the most thoughtful analyses are those generated by the military. Of course, given the importance of a reliable supply chain to military efforts, that makes sense.

We will return to the way theory informs practice. But let’s consider what members of our industry say first.

“The one trait all suppliers must have is to be knowledgeable about their products in order to sell them and educate their customers,” says Stephen Venturini of Wash Bro’s Pressure Washing Store in Mandeville, LA. His company is a Deco Products (Denver, CO) supplier.

“If suppliers really want to have an added edge, they need to keep their communication lines open with phenomenal customer service,” explains Venturini. That includes the readiness “to assist their customer base with troubleshooting of their products.”

Even the tiniest change in a product can slow a customer down. An engaged supplier keeps customers informed of the small things as well as the big ones.

Aaron Lindholm, the CEO/president of Veloci Performance Products in Burnsville, MN, expands on the concept of broad engagement. “A supplier must have great communication and be very responsive.”

Moreover, the responsiveness must be measurable in the shortest possible intervals. “Today’s business world moves very fast, and delayed communication or slow communication is a detriment to business,” explains Lindholm.

Are there any extras that merit attention? Yes, there are, and they set a supplier apart, boosting competitiveness.

“The ability to source or develop products is crucial,” says Lindholm. “We are always looking for those suppliers that keep product sourcing and development at the top of mind.”

Reciprocity

“Suppliers must have awareness of their customers’ needs as relationships develop and evolve,” says Chad Reiffer, distribution program manager at Hydro-Chem Systems Inc. in Caledonia, MI. “Through regular communication and interaction with customers, suppliers are more aware of the most important issues their clientele is needing to solve.”

“The reciprocal awareness forges a tight link between the supplier’s capabilities and the customer’s expectation,” explains Reiffer. Such a link “is more likely to result in a mutually beneficial, longer-lasting partnership.”

Which sorts of awareness must the supplier have? Reiffer lists many, including market conditions, industry trends, new technology, and supply chains. In addition, he says, “Suppliers must have an awareness of the constantly changing landscape in which they exist.”

By evaluating the changes taking place, a supplier can determine where to invest time and capital. The supplier must be “poised to respond to shifts upstream or downstream from their position by addressing gaps in product lines, developing training materials, and properly fulfilling commitments to their customers,” explains Reiffer.

A proactive approach can set a supplier apart, says Reiffer. “It can make them more competitive and result in greater mutual success for both sides.”

Which things should a supplier be proactive about? “Product development, inventory management, changes in technology, updates to regulations, and providing customer resources are all on the list,” says Reiffer.

What is the net result of being proactive? “Suppliers are more likely to gain trust from their customers and set themselves apart from the competition,” says Reiffer.

As for pricing, it falls into the quality-first sphere. “While pricing is crucial at all levels, it may not always be the most important factor,” explains Reiffer. Suppliers can earn the business of customers by being fully engaged— awareness and proactivity combined, says Reiffer. He notes, “Such involvement allows them to respond to consumer/ market factors while providing intangible value for their customers.”

The links that form with such intangibles strengthen a supply chain. They also bolster economic activity.

A supplier may be in more than one place along a supply chain. “For companies like ours and many others, you find yourself on both sides of the fence,” says Reiffer. “As a supplier to countless customers cleaning millions of trucks/vehicles per year, it is critical that we are aware of our customers and market factors.”

In its role as a supplier, Reiffer explains that his company strives to prevent service disruptions, quality control issues, or falling short of expectations. “As a manufacturer, we must also seek out suppliers that align with our values for what we aim to provide our customers.”

The chain that fortifies our industry—and the industrial sector as a whole—guides the planning and actions of a successful supplier. “We understand that our customers in the cleaning industry are also suppliers for their customers,” says Reiffer. “Our customers partner with suppliers that can provide them products and resources and have a vested interest in their combined success.”

Variety

Successful suppliers establish relationships with customers in multiple ways. One supplier may have several types of arrangements in place.

Some customers may routinely buy from a supplier, but amounts of purchases may vary. Studies of strategic resource management (SRM) point to customers who are short-term or onetime buyers as those who are most likely to seek out goods (or services) on price alone. And they may be the most likely to not be satisfied with their purchases (typically because they go forward and find a lower price).

But successful suppliers usually have a stable group of customers. In fact, suppliers selling to large businesses or government entities must often be prequalified by the purchaser. Some of the prequalification process may include the requirement that certain certifications be documented.

The time taken to be prequalified can open the path to increased sales. For example, the federal government has a prequalification process, as do states and local governments. True, many such entities waive prequalification requirements for purchases under a certain dollar amount, but suppliers who want access to big buyers will usually have to demonstrate their capabilities.

The capabilities include documentation of everything from quality of product to inventory methods. In an informal way, prequalification establishes a partnership between a supplier and customer.

Not all partnerships between suppliers and customers are informal. A customer may even want to integrate or subsume relevant financial components of a supplier into its own in-house system. This happens frequently in the computer and health care sectors.

Tight linkages between supplier and customer at the digital level can bring efficiencies. They can also be perilous as recent hacks in the healthcare industry have demonstrated— when an insurer/payer or drug supplier system linked to a healthcare/ hospital system goes down/gets hacked, the health system (and patients) are left wanting.

The SRM theorists offer plenty of models for what works best—or may work best—in an arrangement between a supplier and its customers. Throughout there is repeated reference to the concept of the interaction being transactional.

By transactional, of course, the theory makers mean that both supplier and buyer play a role in determining the type of relationship. For every buyer that evaluates the strength and reliability of a supplier, there should be a supplier who evaluates the strength and reliability of a buyer.

A buyer may promise to purchase a certain amount of product across a year. Can the buyer pay? Is the buyer strong enough to be in business six months hence? For instance, a captive buyer—a model in which the buyer has promised to purchase a minimum amount from a supplier across the next twelve months—will escape captivity with insolvency.

Thus, ahead of being proactive in all the ways our industry sources have suggested, we might add one more trait of successful suppliers: prudence.

It’s easy to be dazzled by a huge order, especially one tied to the promise of more such orders to follow. But being a successful supplier entails a measured approach to doing business. A supplier should know the customer almost as well as the product line.

A strong supplier is the partner of a strong buyer and vice versa.