The Strategic Power of Trust in Supplier Relationships

Author: Alan Day, Chairman and Founder

Trust, according to the Oxford English Dictionary, is “the belief that somebody or something is good, sincere, honest, etc., and will not try to harm or trick you.” In supplier relationships, it is not a sentiment. It is not softness. It is a hard-edged business enabler.

Trust improves transparency, responsiveness and resilience. It is measurable. And increasingly, it is a performance differentiator. Yet many organisations still overlook it, doubling down on control and compliance while underestimating the strategic return of trusted relationships.

Take Apple. In Apple in China, Patrick McGee outlines how the tech giant built one of the most sophisticated supply chains in the world. With over $275 billion in supplier investment and tightly integrated Chinese manufacturing, the scale was remarkable. But the relationships remained transactional. Procurement focused on leverage and price, not shared value. That model looked brilliant until it was tested.

When COVID-19 hit, lockdowns paralysed Foxconn’s Zhengzhou facility, famously dubbed “iPhone City.” Production stalled. Protests broke out. Workers walked. Apple had operational excellence but little relational depth. It had reach, but no roots.

This is the point: suppliers respond differently to customers they trust and choose to prioritise. Becoming a Customer of Choice, the kind of client a supplier wants to work with, not just one they are contracted to, changes the game. It unlocks early access to innovation, smoother issue resolution and better alignment when disruption hits.

Procurement has long treated suppliers as interchangeable vendors. But every new geopolitical, environmental or economic shock makes that mindset more costly. Trust is the variable that determines how fast and how well your suppliers act under pressure.

 

Why supplier trust is the key to becoming a customer of choice

When trust is embedded in a relationship, the supplier becomes a strategic ally rather than a liability. Issues get raised earlier. Information flows more freely. Suppliers become more willing to invest time, resources and ideas into solving shared problems. It does not replace contracts, but it makes them work.

Where buyers show openness, fairness and a long-term view, suppliers usually reciprocate. They share innovations earlier. They ride out shocks. They disclose what is not in the scorecards.

Put simply, trust helps prevent problems or solve them early. It builds resilience. It reduces cost. It turns transactional vendors into growth partners. But like anything valuable, it does not just appear. It needs to be earned and deliberately maintained.

That starts with clarity. Organisations should document expectations through supplier charters, onboarding frameworks and shared operating principles. They should reward trust-building behaviours such as openness, responsiveness and collaboration, not just price cuts. Governance should encourage regular dialogue and joint planning. And executives should widen the conversation beyond cost and delivery to include market expansion, product development and shared risk management.

These behaviours are the hallmarks of a Customer of Choice. Suppliers are always evaluating their clients, not just on spend, but on fairness, collaboration and cultural fit. Trust is at the centre of that assessment. It is what gets you moved to the front of the queue when capacity is tight or innovation is scarce.

 

Building supplier trust through everyday actions and honest feedback

Trust does not need big gestures. It is built when buyers return calls promptly, handle problems constructively and share insights without needing to be asked. It grows when procurement teams take supplier constraints seriously, not just their own. It is reinforced when expectations are consistent across functions, countries and touchpoints.

What trusted supplier relationships look like:

• Clear expectations: Good supplier relationships start with shared goals and an understanding of how to get there. This should be written down, revisited, and reviewed consistently.
• Governance that drives collaboration: Structured meetings, executive involvement, escalation paths that solve problems instead of hiding them. These are trust-building tools.
• Joint business planning: Sit down together. Map out what success looks like for both sides. Define roles and responsibilities. This turns a sales conversation into a partnership. And it ensures you’re not reliant on one person in a supplier’s team to carry the relationship.
• Consistent behaviour: Nothing kills trust like unpredictability. If your teams negotiate with suppliers one way and behave another, the relationship becomes fragile.

But trust also needs to be measured.

A structured Voice of the Supplier programme is one of the most effective ways to do that. Done well, it offers a real-time view of how suppliers perceive your organisation. It surfaces issues before they escalate. It gives procurement and leadership teams the chance to course-correct before things break.

Our research consistently shows that organisations who listen to, and act on, supplier feedback outperform their peers in innovation, responsiveness and commercial outcomes.

Too often, feedback mechanisms become tick-box exercises. Or worse, they are ignored. Without honest input, even well-meaning organisations can drift into complacency. Friction builds. Misaligned expectations pile up. Then, when performance drops, no one knows why.

 

The ROI of trust: turning supplier relationships into business advantage

When trust is strong, suppliers invest their best people. They share early warnings. They bring new ideas to the table, sometimes before you even ask. They stick around during uncertainty. These are not theoretical benefits. They show up in shorter lead times, higher quality, faster innovation and lower total cost.

Trust is not a soft value. It is a measurable asset. A lever for risk reduction, agility and long-term growth. It strengthens even the most complex supply chains. Its absence weakens even the most carefully managed ones.

It is also the foundation of Customer of Choice positioning. In a competitive supply market, trust signals strategic potential. Those who build it gain more than just good relationships. They gain access, insight and advantage.

As we argue in Return on Relationships, supplier management is not just a procurement task. It is a business strategy. And trust is one of the most powerful ways to put that strategy into action.

 

The price of ignoring supplier relationships

Apple’s “iPhone City” experience is a case in point. In 2022, labour protests over bonuses and quarantine conditions spiralled into chaos. Apple eventually recovered, but not without reputational and operational cost. The model was not flawed. It was incomplete. Its efficiency machine lacked a relational backbone. With deeper trust mechanisms in place, the outcome could have been faster, smoother and far less disruptive.

Other industries show similar patterns. Automotive giants have lost long-standing suppliers, not over pricing, but due to years of eroded goodwill. We’ve seen major brands lose key suppliers, not over price, but over poor treatment. In one case, a supplier walked away after ten years—because the client never listened. The cost of replacement was millions.

We’ve also seen the opposite. Clients who invest in training, invite suppliers to joint sessions, share plans early, and use VoS data to guide improvement. These clients get early access to innovation. They get better service. And they get fewer surprises.

Trust doesn’t eliminate risk but it gives you a better chance of managing it.

If you’re serious about building better supplier relationships:

• Be deliberate. Map your relationship strategy. Define roles. Make sure SRM isn’t left to chance.
• Make trust measurable. Run VoS. Act on it. Share the results with suppliers.
• Become a customer of choice and make that part of your brand.

Once trust is lost, it is rarely recovered on short notice.

 

Find out where you stand in supplier trust and performance

 

Participate in the 2025 SRM research to understand how trusted your organisation is by your suppliers. You will receive a detailed, free report on the current state of your supplier management, highlighting your operational strengths and areas for improvement.