Customer Supplier Relationship - Meaning & Importance

Published by MBA Skool Team, Last Updated: December 25, 2020

What is Customer Supplier Relationship?

Customer Supplier Relationship is the business relation between the customers and the suppliers in terms of product quality, services, complaint handling, deliveries etc. Customers and Suppliers are the vital cogs in business. Both have the same goal- to satisfy end consumers. Hence, having a healthy customer supplier relationship is imperative for any business.

Importance of Customer Supplier Relationship

It is of great importance in quality management across organization and should be maintained at all levels of supply chain. It should ideally be a win-win situation for both parties in order to make it a long term and trustworthy alliance.

Customer Supplier Relationship

If we look at, from the suppliers’ end, the relationship is based on the following factors:

1. Sensitivity to customers’ needs

2. High level of business satisfaction

3. Innovation & development

4. Good financial management

From the customers’ end, the relationship is based on the following factors:

1. Timely payments

2. Personalization of the relationship

3. Flexibility

4. Share information

Principles of Customer Supplier Relationship

Some key principles are as below:

1. Quality is utmost important for both customer & supplier.

2. Despite business interdependence, both parties should be independent.

3. Supplier should be provided the exact requirements by the customer.

4. Customer supplier contract should clearly mentioned price, quantity, payment terms, delivery etc.

5. Supplier should ensure good quality of the products.

6. Quality audit should be decided between the supplier & customer.

7. In case of any disputes, customer & supplier should settle matters properly.

8. Customer supplier relationship can be strengthened by continuous communication.

9. Basic activities like procurement, inventory planning etc should be well planned.

10. Customer & supplier should work together to to grow together.

Hence, this concludes the definition of Customer Supplier Relationship along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

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