The importance of a quality supplier and the role they play in helping companies succeed is necessary in the relationship building process and in getting a quality product. In turn, if they can help in your successes they can also contribute to your failings. Consistent quality, smooth operation and profitability are the minimum goals you should be striving for. No supplier is perfect; however you may want to think twice if you repeatedly encounter any warning signs of a bad supplier.
1. Who’s Calling the Shots?: The days of signing long-term supplier contracts or committing to large volumes for minimal price discounts aren’t gone, but there are With the mass popularity of offshoring/nearshoring there are literary thousands of manufactures ready to supply you at the drop of the hat. If your company is risk-adverse enough, there is a world of supply options all placing you in control. No more supplier hostage, crippling your market competitiveness by holding you to purchase volumes reflective of years past.
2. Outdated Pricing: When your supplier is slow to react to a downturn or upswing in the market, it is impossible for you to stay competitive. Good suppliers will change their prices weekly reflecting their current capacity, raw material prices, and overall market conditions.
3. No or Infrequent Communication: Your supplier should be considered an extension of your organization so when you can’t get them on the phone or have a hard time scheduling an in-person meeting it’s time for a change.
4. Benchmark Technology: Not always the best indicator because sometimes the best manufacturing processes are the old tried and true methods. However when dealing with complicated products, you will more often than not receive superior quality from a supplier that uses the most current and cost effective machines or programs to manufacture.
5. Supplier Volatility: Poor/missed paper work, unresponsive to complaints or bad service can all be tolerated for a short while. However if prolonged these symptoms, regardless of price, are hard for any company to overlook. When your supplier misses the mark, make sure you take every step to show them the corrective actions to take. Then provide them with an opportunity to redeem the situation. If after all that your problems still exist, you have no choice but to let your under performing supplier go.
Your relationship with your supplier should be viewed as a partnership. With both sides thinking long-term. The best competitive advantage a company can create is the relationship it forms with its suppliers, because in the end products can be duplicated, relationships can’t.