For most business these days, particularly smaller businesses, being able to cut back on unnecessary costs has become vital due to the tough financial and economic climate.
However, according to a recent report many firms are losing huge amounts of money as a result of problems with suppliers. In fact, it is claimed that resolving problems with suppliers is costing companies in the UK in excess of £10 billion every year – money that businesses, especially small ones, cannot afford to lose.
The data comes from the Institute of Customer Service, which claims that employees in the UK spend an average of close to 5 hours per month trying to sort out issues with suppliers, and this does not include additional time that is spent by more senior staff such as managers and directors in trying to sort out supplier problems.
More than 2,000 people were polled as part of the survey, and the results showed that close to 60 percent of senior staff on more than £100,000 a year were spending more than one day per month dealing with issues arising due to supplier problems. For those on lower wages, the percentages dropped, which suggested that the higher the income of the individual the more time they seemed to spend trying to sort out supplier issues.
Problems with suppliers cost time and money
An official from the Institute of Customer Service said that issues arising from problems with suppliers were taking up a significant amount of time amongst executives, which meant that they were taken away from their more pressing duties.
This in turn was having a severe negative impact on business finances and revenues, resulting in the huge collective loss being experienced by UK firms.
The ICS also said that it was vital for businesses to build on relationships not just with customers but also with suppliers, as the latter could have such a big impact on performance and revenues. Those experiencing regular and unfounded problems with suppliers need to be more proactive in terms of meeting up with suppliers to get the issues resolved or switching to alternative suppliers in order to benefit from improved service.
This problem is one that affects all types and sizes of business. For small businesses, limited cash flow and staffing levels could mean an even greater negative impact from problems with suppliers, making it even more important to take steps as early on as possible.