There are actions available to most buyers that will surely create better supplier relationships.
A Dell Computer executive dealt with the issue of “what your suppliers really think of you and what you can do about it” in a recent webinar. Proficient Sourcing helps buyers seeking new custom manufacturing sources, so anything that helps cement a positive relationship is of great interest to us. “Commitment to Utilization” was one webinar point that has particular application for these circumstances. When a potential supplier believes the buyer has a serious interest, and maybe even commitment, to use the supplier, there is a good start towards a strong relationship.
This interest/commitment can be demonstrated by providing prospective suppliers with more information about the environment associated with the work to be quoted. While confidentiality issues prevent disclosure of some things, we suggest consideration of these categories when soliciting new suppliers.
- What is the future for the item (or items) for which the RFQ is generated? Is this a startup situation? New product? Replacement of existing supplier? It would help the prospective supplier if some indication were given about the future. An example might be “quantities for this item could grow significantly within 2-3 years”, or “this item is part of a mature product, and future quantities are expected to be stable”.
- Occasionally situations have occurred where a specific quantity of parts was quoted, and business won. Later the supplier discovered the item was subject to a very erratic demand schedule, with some requirements many times that of others. This does not need to be a surprise, and if it is, problems can occur. It should be possible to include some comments in the RFQ that deliveries are to be expected on some specific frequency, and quantity variations of some estimated amount could be anticipated.
- Is there a PPAP or other extensive qualification process involved? This is especially relevant if required material purchases are significant and the lead-time from first article submission to sale revenue is great. If this is the case, we suggest a detailed conversation with the prospective supplier as early as possible. This is another case where that discussion might involve the buying company purchasing the material, at least initially.
- Most of the suppliers we deal with take new business with an expectation that excellent performance can lead to increased business opportunities with the buying company. With that in mind, buyers who add information about future opportunities might find better RFQ responses. For example, the RFQ might state that the item being quoted is one of several things that could be considered with good supplier performance. Or it is a one-time thing, which might attract a quote from a supplier with only temporary available capacity.
- Paperwork has become a problem early in a relationship in a few cases. One of the discussion points in the webinar had to do with suppliers visiting the buyer’s facility, and paperwork is a subject that would be an excellent one for such a visit. In our experience the buyer’s company is usually far larger than the supplier, and probably has established procedures for labeling parts and packaging. There may even be a need for special labeling due to multiple departments receiving shipments before use. Many small companies are not sensitive to such circumstances, and seeing the facility helps the supplier candidate understand why such administrative requirements exist.
Finding a new supplier is usually a difficult task with risks on both sides. When the prospective supplier is well informed about the buyer’s circumstances there is a better chance of the buyer becoming a “customer of choice” and the supplier being a better fit.