What Suppliers Say About Buyers
By Ed Rigsbee, CSP
(850 words)
I recently delivered a partnering presentation to the National
Association of Chemical Distributors at their annual meeting. A couple months
before the meeting, I visited the convention chair, Pat Marantette, at his Southern California
business, E.T. Horn Company, to learn more about the industry. One of the things he told me was that
he was more concerned with the relationships with his suppliers than the
relationships with his customers. He went on to explain to me that without his
suppliers, he was out of business.
In thinking back on the visit, asking how important are suppliers to your
business success is an important question. The following is excerpted from my
latest book, PartnerShift-How To Profit from the Partnering Trend.
I believe you’ll be asking yourself questions in reference to the
relationships you enjoy, or do not enjoy, with your suppliers.
 At the Building Service
Contractors Association International’s 1997 Chief Executive Officer Seminar
in Los Cabos, Mexico, one of the suppliers to the industry was assigned to
present a presentation based on what the suppliers in general said they did not
like about the contractors, their customers, actions. While Rob Kohlhagen,
senior market development manager at SC Johnson Professional delivered an
exceptional presentation, I’m not sure he ever forgave me for assigning him
the task. Admitting the comments came from only one industry, I believe they are
universal, as they have applied to most of the industries that I have counseled
or studied.
Power manifests through knowledge. It is important to know what your
suppliers have to say about you. Completing Relationship Value Updates are
important, as they will help you to avoid some of the following problems and
open a conduit for communication. Remember, you can learn from another
industry’s problems. Below are listed the three general areas of complaint
from the contractors’ suppliers. Also there are some of the specific comments
offered about the contractors. Their comments point out universal issues that
suppliers have with their buyers. Most will apply to your industry. If you
explore issues you might have with your own customers, there is a good chance
your suppliers could have similar issues with you.
- Fear of
commitment.
·
“They are not willing to single source but still want our total
bundle of value-added resources at no additional cost.”
·
“They focus on reducing price rather than reducing cost.”
·
“They like to shop around regularly to satisfy curiosity . . .
they are afraid that we will abuse the relationship.”
·
“They want direct prices but local service.”
- Operations
level support.
·
“We get commitment from top management but the program gets
derailed at the operations level.”
·
“Top management is reluctant to mandate changes to operations .
. . they try to build consensus but it doesn’t happen.”
·
“Operations people have their ‘personal favorites’ . . . old
recipes they swear by that they will do anything to hold onto (including
sabotaging the partnership initiative).”
·
“The partnership is conceived at the executive level but the
lower level departments are never convinced that it is in their best interests
too.”
- Communication
breakdown.
·
“Everyone is so busy we only communicate when there is a need
for fire fighting . . . hence the relationship takes on a negative tone over
time.”
·
“We never discuss mutual opportunities . . . it’s always,
“How do we fix what isn’t working?’”
·
“We talked about the importance of communicating at all levels:
executive, operations, purchasing, training, risk management and quality
assurance but there is no structure established to make it happen . . . so it
doesn’t.”
·
“The chemical supplier cannot partner independently with the
building service contractor. There is an interdependence between the chemical
and equipment and supply manufacturers but there is no communication link
established between us.”
Interdependence
is an idea that carries much power. From the Harvard Business Review, July/August 1994, “Active collaboration
takes place when companies develop mechanisms, structures, processes, and skills
for bridging organizational and interpersonal differences and achieving real
value from the partnership. Multiple ties at multiple levels ensure
communication, coordination, and control . . . more communication than anyone
anticipated is necessary.”
Thomas Gale,
editor at Modern Distribution Management,
has his opinion about the integrity of some customers. From the November 10,
1994 issue, “And while many customers are talking about integrated supply partnerships,
there are (and will always be) customers that are ultimately seeking price
reductions, playing one distributor off another, without a willingness to
explore how a true partnership can save money for the customer while providing a
fair profit for the distributor.”
Developing
a conduit for communication is not difficult but frequently overlooked in many
industries. The Internet makes this even easier. Some industry associations are
providing this service through members’ only sections on their web site. More
trade and professional associations are helping to create this type of
multi-function participant forum, but not enough. This area is a tremendous
opportunity for associations to add a very high-level of value for their
members. Continue the dialogue with all stakeholders in your business.
To
access helpful additional information from Ed Rigsbee at no charge,
please visit www.rigsbee.com/downloadaccess.htm.
#
# # # #
Adapted from PartnerShift-How
to Profit from the Partnering Trend by Ed Rigsbee, CSP, published by John
Wiley & Sons, New York, October 2000. Ask for PartnerShift at your
local bookstore or available from Amazon.com.
Ed Rigsbee, CSP is the
author of PartnerShift, Developing
Strategic Alliances and The
Art of Partnering and has over 1,500 published articles to his
credit. Ed travels internationally to deliver strategic alliance keynotes
and workshops. When you need a speaker or consultant on partnering, Ed can be reached at
ed@rigsbee.com or visit www.rigsbee.com.
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