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Group Purchasing Strategy for Strengthening Supplier Relationships

Having deep relationships with your suppliers is the best way to ensure you are taken care of and your orders are fulfilled. Whether it be a product or service, delays and shortages happen BUT when you have an open line of communication and a relationship with your supplier, it is more likely that you will receive quick, quality service. 

Supply Chain Now

Making and maintaining strong connections is one of the most important ways to ensure strategic maneuvers in the marketplace. Procurement and supply chain managers can look to a group purchasing organization (GPO) to open them up to stronger connections with industry-leading national suppliers. 

Keep reading to learn how partnering with a GPO can help you deepen your supplier relationships.


In partnership with The Supply Chain Now Podcast, our very own Robert Mietus was joined by Johnathan Foster of Lanter Delivery Systems to take a deep dive into the GPO process and how it can save you time, money, and resources by leveraging longstanding relationships.


What is the Importance of Deep Supplier Relationships?

Partnering with a GPO is almost like having a big brother according to Foster. When new trends appear or nationwide struggles start to come down the pipeline, you don’t have to navigate it alone. You have a trusted advisor to collaborate with in order to prevent hiccups in your procurement process.  

GPOs help you deepen your supplier relationships in three key ways: 

1. Achieving Power and Scale

Instead of experiencing delays working to build relationships on your own, a GPO partner has already combined the purchasing power of collective businesses to leverage better pricing, service levels, and account representation from suppliers.

The relationships between a GPO and its suppliers are often deeper than any procurement or supply chain team could establish on their own, and leveraging the GPO’s deep vendor relationships could be the single most powerful thing your organization needs in a volatile market.  

2. Managing Total Cost of Ownership

When it becomes tough to source products and services you need, you might rush into whatever option is available. While this might get you a quick solution, it’s important to also focus attention on total cost of ownership (TCO), which involves analyzing all the additional costs that may arise during a product’s lifetime.

As you begin your next transaction, leaning on your GPO’s supplier relationships can help minimize your company’s risks and allows the group purchasing team of experts to guide you through managing TCO.    

3. Monitoring Relationships

A group purchasing organization’s supplier partners have unique capabilities, and in today’s environment, strategic GPO suppliers can bring better efficiency to your operations. Procurement leaders are managing a large spend cube with several categories and may not have the time or resources to effectively manage relationships with each of their suppliers.   

As we deal with market challenges, product and labor shortages, there's ongoing communication between the GPO and supplier partners to discuss problem-solving ideas, innovation, and product development.   

Group Purchasing Strategy

Greg White

It takes a village to execute a streamlined purchasing process. There are so many moving pieces and possible hiccups that can happen along the way. Leveraging group purchasing gives you the peace of mind that you aren't navigating the rocky market alone and you have a team of procurement professionals managing your contracts. Let your GPO free up your time so you can focus on other areas of your business.  


Ready to learn more?