With the economy still emerging from the doldrums, businesses at the top of supply chains (which means, in one way or another, all businesses) are being advised to shop around, research the market, ask for references and in general make absolutely sure they have constructed a hierarchy of suppliers who are the most efficient, productive and reliable businesses around.

It means that at every link in the chain, each business has researched the one supplying it. The result, hypothetically, is a long line of vetted businesses from the excavation of raw materials right through to the distribution of finished products.

Official advice concerning sourcing suppliers says you should look for quality and reliability, assess whether companies can be quick as well as flexible, look at value for money, consider whether communication channels are clear and investigate financial security.

Roughly translated, it means if you want to be a supplier – particularly to a big business with endless resources – then you must offer the highest standards of quality and customer service, be seen to be a solid business and accept wafer-thin margins.

Throw in modern concerns regarding your environmental status and whether you have a genuine commitment to corporate social responsibility and you’re left with a set of targets that are just shy of unachievable.

To make these targets a little more realistic, read on for some helpful insight into the mind of a B2B customer.

The supply chain is serious business

Businesses getting serious about the management of supply chains, from selecting the right businesses to ordering them efficiently and elegantly. Big companies, especially, have a structured protocol for deciding who wins tenders, based on the age, structure, references and track record of their new supplier.

They will bargain hard to get the best price, and might even renegotiate on cost after selecting a preferred supplier.  They will have exacting terms and conditions, break clauses and legal get-outs should your standards slip for whatever reason.

If you are lucky, your new client will want to solidify and deepen the relationship by involving you in their plans and inviting you to share their vision. This is best practice, but unfortunately contracts don’t always run this way.

Lastly, expect regular performance reviews. You will have agreed to certain standards before winning the business so expect to be assessed on this basis from then on, at least every 12 months if not more regularly.

Technology use is one the up

Increasingly, companies at the top of the supply chain expect the businesses they partner with to be technologically proficient. Software on the market now allows businesses to track each other’s movements – giving them clarity about when jobs are likely to conclude.

E-collaboration, or the act of sharing information virtually and in real time, is all the rage. Prestigious clients will expect you to be able to sync with their software, or simply to implement theirs in your organisation, so that they can track orders to the minute.

These firms will also likely have analytical data software, which can compile accurate data about the reliability of your work from the first job to the most recent. Enterprise Resource Planning (ERP) software is also popular; it syncs planning and orders and so that jobs can be booked, tracked and invoiced for automatically.

Software allows companies to match orders with supply, as well as invoice automatically, saving time and money

Just in time?

With a prestigious client, margins will likely be tight. So you might be tempted to consider ‘just in time’ production and supply techniques. This is basically minimising cost by creating and supplying goods to order rather than distributing from existing stock.

This reduces the risk of over-ordering and reduces your warehousing needs, while freeing up more cash to invest in other areas of your business. It also reduces the risk of your business being impacted by a flood or fire.

A word of warning, however: the example of G4S – who famous undersupplied the Olympics with security staff despite a multi-million pound contract to do so. G4S admitted that a just-in-time approach to recruitment – which meant paying people for less time – was responsible for the shortfall. It doesn’t always work, so think carefully before you implement it.

Becoming a ‘preferred supplier’

Preferred supplier status is highly sort-after by businesses everywhere. It simply means that a buyer will look favourably upon your business in a tender battle with another. Winning preferred supplier status isn’t easy, but it is straightforward: build up a reputation for quality and reliability and customers will come back every time.

Being part of a supply chain isn’t always a comfortable place to be, but if your business is committed to the principles of good business then life will be a lot smoother. Let cracks appear, however, and the ‘chain of pain’ could set your business back.