Creating and Maintaining a Top Ten Poor Quality Supplier Performer List

BradM

Staff member
Admin
#11
If anyone is remotely interested, Agency Theory goes a long way in explaining a lot of the thoughts here.
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I would submit to you, though, if you have a supplier with poor quality, it will always be less expensive to add another approved supplier than dealing with them.

Mike, I know you were stating a reality. But I am still of the mind that it don't matter how big you are, you should still be receiving excellent service. Too, you may only comprise 2% of your current suppliers business, but you may comprise 10% of the next suppliers business.

Do you have to have some formal written justification for adding a new vendor, or is it pretty easy to do?
 
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Mike S.

Happy to be Alive
Trusted Information Resource
#12
It is usually cheaper to qualify a new supplier (long term) than to fight with a supplier who is capable of treating you like crap.

It does not have to be expensive to qualify a new supplier, but it is always expensive to deal with a bad one.
Sure, sometimes you can re-qualify new suppliers for a reasonable cost relative to putting up with a crappy supplier. But, trust me, sometimes it is cost prohibitive, especially when it is for aerospace products sold to the military via a major defense contractor. The expenses for my company are estimated at 7 figures when all is said and done, which is ~ 25% of our yearly profit!
 
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Wes Bucey

Quite Involved in Discussions
#13
Sure, sometimes you can re-qualify new suppliers for a reasonable cost relative to putting up with a crappy supplier. But, trust me, sometimes it is cost prohibitive, especially when it is for aerospace products sold to the military via a major defense contractor. The expenses for my company are estimated at 7 figures when all is said and done, which is ~ 25% of our yearly profit!
Bummer!

One of the reasons I wrote
"sole source supplier - keep the romance going with lots of personal communication - these are the guys you HAVE to have a true partnership with because replacing them is almost too traumatic to contemplate."

was because I DO understand some situations make it next to impossible to change suppliers due to problems up and down the supply chain, not just the difficulty of finding another supplier with capability and capacity to make your product.

Did the ownership change come as a surprise or were you notified well in advance and given an opportunity to meet and "bond" with the new owners? If it was surprise, your relationship with the supplier was not as close as it could have been.

Obviously, something more than ownership change has occurred in the relationship or else the second company would not also be giving your company grief.

In terms of sole source, I was on both sides of the "sole source scenario"and made it a large and high priority to know nearly as much about things at my supplier as I knew about my own company. The situation as a sole source is also "iffy" if the purchaser is secretive about plans for changes and nurses a "grudge" for real or imagined offenses of the supplier.

It may be a difficult notion for people to follow or accept, but the personal relationship between buyer and seller has a large effect on the "perception" of events which occur from time to time:
  1. If my purchaser started stretching out payment beyond contract terms, in my mind, that was as big a breach of the relationship as if I was consistently late on delivery (delivery of goods or delivery of payment have equal weight in my mind.)
  2. If my supplier changed from same day response to a query to "next day" or "next week," it was a signal that something was seriously wrong with the relationship. If the late response came without an effusive apology, that was absolute proof the relationship had degraded. As a good quality pro, the task is to determine root cause and either make a correction AND corrective action OR prepare to dissolve the relationship.
  3. If quality of product or packaging showed a trend to worsen without proactive comment from a supplier about efforts toward corrective action, this was a big signal the supplier's organization was deteriorating, not just the relationship between us.
When the relationship cannot be repaired or if the supplier organization is deeply flawed (whether because of something the purchaser has committed or omitted or due to outside influence), it's time to get a new supplier, no matter how inconvenient, costly, or painful, BECAUSE the ensuing problems will inevitably cause more pain and cost more than changing suppliers.
 

Helmut Jilling

Auditor / Consultant
#14
Sure, sometimes you can re-qualify new suppliers for a reasonable cost relative to putting up with a crappy supplier. But, trust me, sometimes it is cost prohibitive, especially when it is for aerospace products sold to the military via a major defense contractor. The expenses for my company are estimated at 7 figures when all is said and done, which is ~ 25% of our yearly profit!

True, aerospace and military changes the equation considerably. Good luck!
 

Mike S.

Happy to be Alive
Trusted Information Resource
#15
Bummer!

Did the ownership change come as a surprise or were you notified well in advance and given an opportunity to meet and "bond" with the new owners? If it was surprise, your relationship with the supplier was not as close as it could have been.

Obviously, something more than ownership change has occurred in the relationship or else the second company would not also be giving your company grief.
Wes,

We knew in advance -- though it was before I got here. Still...efforts certainly were made to "bond" with the new top dogs, but it is folly to think that a close relationship can be had when only one party has interest. Surely you have learned that lesson in life! No matter how diligent you are and how wonderful your relationship management skills, sometimes the relationship goes down and there is nothing you can do about it.

What you state as obvious is really not so. Out of hundreds of suppliers, and a couple dozen key ones, why does it shock you that 2 companies may change considerably unless we did something to provoke them?

I honestly can't say that it is worth $1M plus to change this supplier at this time. But for $100K it would probably be worth it just to be able to tell them to take their product and ...
 

Wes Bucey

Quite Involved in Discussions
#16
Wes,

We knew in advance -- though it was before I got here. Still...efforts certainly were made to "bond" with the new top dogs, but it is folly to think that a close relationship can be had when only one party has interest. Surely you have learned that lesson in life! No matter how diligent you are and how wonderful your relationship management skills, sometimes the relationship goes down and there is nothing you can do about it.

What you state as obvious is really not so. Out of hundreds of suppliers, and a couple dozen key ones, why does it shock you that 2 companies may change considerably unless we did something to provoke them?

I honestly can't say that it is worth $1M plus to change this supplier at this time. But for $100K it would probably be worth it just to be able to tell them to take their product and ...
I'm sorry. I did not mean to imply the customer had done anything to incite the change, merely that sufficient warning of an impending change, regardless of the cause (ownership or employee change for example), sometimes makes it easier to use the time to arrange for an alternate source of supply. Especially the part about working with folks upstream in the supply chain to accept such change, especially when you can explain the advantage for everyone.
 
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