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Management of Supplier Relationships

A company's database is one of their most valuable assets. Therefore, the relationship between the LSP and their suppliers is key to the success of the supply chain. Establishing and developing these relationships is one of the main responsibilities of the Vendor Manager. 
In every relationship, we need to take into account each party's power. The matrix below will help the Vendor Manager assess the effectiveness and strength of the company's database by taking into account each party’s interest in the collaboration and the translation market. This analysis will split the database into four main groups: 

Key suppliers – Supplier dominance

This group should include the company's go-to suppliers. The people that the company can always rely on, who work with their most important clients and who generally deliver quality translations. The supplier should receive a large amount of work from the company, and have worked with them on a long-term basis to qualify for this group. This kind of relationship is created when it has been proven that working together is beneficial for both parties. 
In addition, some of the suppliers in this group should be those who excel in one of these areas: dealing with rare language combinations or subject matters, exceptionally good quality or exceptionally reliable.
When looking into recruiting this kind of supplier, the Vendor Manager should make sure that the company's offer is attractive enough for the supplier, as well as monitor recruitment costs carefully. 

Maintain satisfaction – Interdependence

This relationship dynamic occurs when there are a few clients and suppliers interacting with each other. They need each other to survive in the market, and want to work together long-term. The important characteristic of this group is that none of the parties have total control over the collaboration, and the power is balanced. 
The company may choose to replace the supplier, or the supplier may give priority to another client's work at any point during the collaboration. The change may be costly for one or both parties, but it would be easy. 


Keep informed – Buyer dominance

This group can be big or small, depending on the specifics of each company. The client will  have most of the power in the relationship, leaving the suppliers with very few options as they are dependent on the client's work. 
The Vendor Manager should take into account that recruitment for this group will be low-cost and easy.

Non-critical – Independence

If the market has lots of buyers and suppliers, both parties act independently. The cost of changing suppliers is low, and there are many alternatives. The suppliers have multiple clients to choose from.
Management of this group of suppliers should be easy and mostly production-related for the Vendor Manager.


On the other hand, the Vendor Manager could extrapolate this matrix to a specific pool of translators, for example, the group of suppliers that work on a specific account on a regular basis. 
Dividing a pool of suppliers in this manner will tell the Vendor Manager the current status of the database, so that new actions can be taken to improve the pool and develop relationships according to the company's requirements. 
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