Reichheld 2001 believes that supplier loyalty is

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Reichheld (2001) believes that supplier loyalty is derived from the “personal integrity of the senior leadership team and its ability to put its principles into practice.”By linking the organisation with their suppliers through the Web, it has been found that “the Web can dramatically deepen relationships and effect enormous efficiencies”(Reichheld, 2001, p.7). Barriers to maintaining effective relationships determinedMake sure that you are aware of the barriers that can arise from your actions. These barriers can impede your progress and stifle your organisation’s ability to adapt in a globalised and technologically advancing time period. Being aware of the barriers to maintaining effective relationships assists you in making sure that you do not inadvertently destroy your relationship.The barriers to maintaining effective relationships include:fCommunicating clearly –One of the factors that drive an organisation to bankruptcy is the clear lack of communication between the suppliers. Communication should be clear and concise. Both the supplier and your organisation need to be aware of exactly what they want and must work towards ensuring that both parties have the same goals.When a party is not clear on the supplier relationship, relations can become tense and the relationship can falter.fKeep it short and simple –Using long sentences and verbose words can confuse the supplier relationship. Make sure that your sentences are short and clear. This will ensure that there is no confusion in the supplier relationships that you have.fKnow what is in it for your supplier and yourself –Some organisations are not always clear about what they want from a relationship. Your organisation may be trying to cut costs by outsourcing the research and development of components. It is important to make sure that your supplier is also obtaining something out of the relationship. If the supplier is not obtaining any monetary gain because they are breaking even, then you need to make sure that they are obtaining something. If the client does not gain anything from the relationship then this could drastically affect the effectiveness of the supplier relationship.Having a strong leadership team - Having a strong leadership team that can effectively and efficiently guide their suppliers into being loyal will ensure that the relationship stays strong long after it has been established. Management needs to show that they are honest, reliable and that they will follow through on all of their promises.The final decision on whether the supplier is taken will be based on factors that influence the operations of the organisation and the organisation’s policies,
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32 WORKBOOK | © 2016YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGEBSB51915 DIPLOMA OF LEADERSHIP AND MANAGEMENT | OPERATIONAL PLANNING_V2.4practices and procedures that may include:forganisational cultureforganisational guidelines which govern and prescribe operational functions,
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