Customer Relationships - Visits from Competing Customers

[apestate]

visits from competing customers

Hello quality professionals

I am in need of some wisdom and advice regarding customer relationships.

We are a small hardware shop machining components for many different types of organizations.

Our two largest customers are in direct competition with eachother, and their competition is becoming more and more fierce. Each is pursuing their suppliers in order to improve delivery of quality and reduced costs. They both like to be in cooperation with their suppliers and are accelerating communications.

We would like to supply both customers with the same impartial cost improvement, with full faith in both businesses. However, during plant visits, it will be very obvious to either customer that we have a large stake in the business of the other.

Will this present a problem that should be avoided? Screw machine shops of the past have been heavily defended against disclosing any of their information. I would like to open the doors to our customers to let them see their parts in process, so that they can compare our efforts and capabilities against OUR competition.

Are they going to get a bad and unforgivable feeling from the fact that we're doing well with their best competitor?

 

[Bob_M]

Does customer A know you supply customer B with similar/same part?
Vice Versa?
------------
I'm sure others will give you better comments, but just make sure they are not exposed to any confidential or propriatary info during the visit.

In the past we've had competing customers buying the EXACT same finished product, except for packaging (labels and customer name on box) and stamping of part numbers for one of the 3 customers.

One of those customers moved business to Mexico (less $$).
One of those customers buys low volume and always has.
One of these customers was bought out buy an even older customer which we hadn't really been selling to for a long time.

I'm not sure if the CEO's knew we supplied their competition but some of the buyers did. But the parts we universal vent kits, so making for more than one customer really was not a major issue. I don't know if prices were similar...

 

[db]

Re: visits from competing customers

I'm sure others will give you better comments, but just make sure they are not exposed to any confidential or propriatary info during the visit.

Excellent comment. I would go a bit farther in showing how you prevent cross-contamination of propriatary info.

 

[Bob_M]

Re: Re: visits from competing customers

Excellent comment. I would go a bit farther in showing how you prevent cross-contamination of propriatary info.

Of course that could be difficult if you make the SAME part for mulitple customers, each potential with their own print/requirements BUT your realistically only use one of their prints or use use an internal universal print. (Most of our stamped parts fall into to this situation, luckily most parts have similar and/or overlapping dimensions/tolerances.

 

[Aaron Lupo]

Re: visits from competing customers

However, during plant visits, it will be very obvious to either customer that we have a large stake in the business of the other.

Are they going to get a bad and unforgivable feeling from the fact that we're doing well with their best competitor?

I don't see any problems here. This happens to us all the time, do your larger customers really think they are your only customer. Just make sure you keep and confidential information confidential. Just out of curosity how would it be obvious that you have a large stake in the others business?

 

[Randy Stewart]

In the proto business we have to set some strict policies in this area. It's very difficult to segregate parts in the press room. A 2006 GM fender may be running next to a 2005 Ford Door. We have different engineers through everyday. We do what we can and still maintain productivity.

When all that is seen is one piece of an automobile, most of us can't put it together and visualize the whole car or truck. So on the shop floor it is not a real difficult problem. However, in the CAD area it's a different story. We have different rooms/cubicles for the different systems. The customers can come in and review the CAD tubes and never have access to the other designs.

They all know we are a subsidiary of Ford and at first it caused some problems, but after seeing how we take care of Chrysler, GM and other Tier one property they were more relaxed.

You should not have issues as long as customer service is the same for each of your customers and you maintain any proprietary information from the competitors.

 

[Mike S.]

I agree with the above -- should be no problems. Just realize some customers who know you do parts for their competitors will try to either get you to tell them things about the competitors (don't ever do it) or will actually try to sneek around and get into things they shouldn't. I've had to politely reign in a few visitors from abroad who tried to access confidential or proprietarty stuff. Until you know they are trustworthy, or all confidential stuff is locked-up, watch them very closely.

 

[apestate]

Bob_M they don't know that we make parts for the other guys, but they would LIKE to. Randy Stewart, that's engineers, calm ones, from big old companies. Mike S. That's what I'm AFRAID of, you don't know these guys. ISO GUY they would know that we're doing business with the one company. These guys will come into our shop with three or four people and the higher ups will use us to TRAIN the lower people.

first company measures us for us, gives us documents to walk us through stuff, operates our nonconforming product procedure, gives us awards to encourage us, performs the odd quality audit to see how we're doing, and takes us out to golf!

These guys don't operate that way. they rely on people exclusively. and they're freaking GOOD ohmygodomigodomigodomigodomigod what do I do.. these guys are freading Ayn Rand and I'm piddling around at their supplier conference.. do de do.. they're organized into gangs of people and every group has a CHARGE. They pull off major moves in MONTHS. I probably walked right through gangs without even knowing it. They're in a market that's only going to improve as long as...I mean... these guys are pulling stuff off that SCARES ME>

these guys mention the one company. snnensnsnnssnsnee snee snee snee snee. "we won that out over that ONE company. it was a vicious, cruel, hateful, bitter, bloody battle, but we WON it. We won it. then we won OTHER kit. We're going to BLAST this kit, is this room LISTENING!?Q!?" RAZAAAAAAA RAAA RAAAAA"DDD O YOU GOT ANY QUESTNS????"NOOOOOHFSLEVRSSSSISSSHEHSHHH

they're going to eat us alive

 

[Claes Gefvenberg]

We did discuss business secrets before. See Defining Customer Property

/Claes

 

[SteelMaiden]

Re: Visits from Competing Customers

they're going to eat us alive

atetsade, from your description, I am thinking that you might want to have an ambulance stand by to carry off the wounded? But seriously, if doing business is this unpleasant, it certainly can't be very profitable in the overall, can it? IMHO, get your key staff together, bring in some GOOD training for conflict resolution, assertiveness, and contract negotiation. (find out, if you can, what classes they give their people to turn them into such aggressive killing machines) You guys need to fight fire with fire, at least from the way it sounds. I would not want to live in the OhmyGodomygodomygodomygod paradigm for very long. I understand that they are the or one of the biggest customers you have, but if they run you out of business they won't be your customer for long. Get organized, eat plenty of carbs, and then go out there and kick butt.

Good luck, they need you as a supplier as much as you need them as a customer.