Which is better - Quietly quit using a supplier or tell supplier?

outdoorsNW

Involved In Discussions
#1
If, after poorly resolved repeated quality problems (same defect, same cause, same part), you decide to reduce using or quit using a supplier, is it better to tell the supplier or just move the business?

Nothing in the supplier’s possession needs to be returned. We have not decided if some no problem legacy jobs will remain with the supplier.
 

Marc

Retired Old Goat
Staff member
Administrator
#2
My opinion: Tell them and tell them why you made your decision. What do you have to lose?

:2cents:
 

Miner

Forum Moderator
Staff member
Super Moderator
#3
You need to anticipate how that supplier may react. I have seen occasions where the supplier found out and quality, delivery, and everything else rapidly got worse. In other cases, the supplier was glad to get rid of the business and cooperated fully in the move.
 

Marc

Retired Old Goat
Staff member
Administrator
#4
Excellent point, Miner. Never threaten. And if you decide to just reduce orders (rather than to just stop using the supplier), have a good contingency plan ready.
 

Golfman25

Trusted Information Resource
Trusted
#5
If you're going to keep some jobs there, you're better off being up front. And you better make sure that the new guy can do it. A lot of time we find issues from other suppliers that they have no shot at correcting because of what they have been given to work with -- GIGO. Good luck.
 

Ninja

Looking for Reality
Trusted
#6
I would leave or not leave...not halfway. The supplier is reliable, or it isn't...

If leaving, I would vet the new supplier over several shipments (lots) prior to contacting the old supplier to tell them why you left.

Risk management: If you leave to a new supplier, tell the old supplier that they have quality issues and that's why you're leaving, then find out the new supplier is less reliable...then go back to the old supplier...I would expect equal or worse quality, and a higher price...

Make sure you're in a boat that doesn't leak before you tell the old boat's captain that his boat leaks too much.

There is no requirement to tell your old supplier why you left, but if you ALREADY have a good relationship with someone there (production manager, QC, Sales)...letting that person know might give them leverage to start improving things. I would not let the company know...just the person(s).
Companies don't change things, people do.
:2cents:

I changed heater suppliers twice in 3 months.
The old one was poor quality and slow.
The new one was fast and accurate....for the first shipment.
The second shipment was 2x slower than the first supplier, and they charged me a second time to make up for unforseen expenses before they would ship.
I had no choice...I needed the parts.
I had to spend a lot of time and angst finding a third supplier...that's why I caution you to get several shipments from the new supplier before committing.
(FWIW, only the second {worst} supplier was ISO9000 certified)
 
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Wes Bucey

Consultant/Advisor
Moderator
#7
I always find the truth is best, no matter how temporarily painful (rip the bandage off school.)


The complications arise when the truth is not always the whole truth.


someone may say, "the quality has deteriorated."
Was seller cooperative with buyer in tracking the problems or did Seller essentially ignore requests for improvement?
If no cooperation, THAT is the true reason.


Some may say, "they don't treat us like a good customer."
Is the buyer a good customer? Always pay in full on time. Doesn't arbitrarily reject entire shipments without first conferring with seller on possible amelioration?
The real truth may be the customer is a bad customer and doesn't deserve A-level treatment.


some may say, "we're being price gouged."
Is this pricing entered into after careful Contract Review? If not, the truth may be the customer didn't shop well. Are the prices being raised? What explanation do you get? Is everything else satisfactory? (sometimes the devil you know is better than the one you don't)


In summary: Be sure what the REAL TRUTH is and simply state it. Every one-time lover wants to know the reason if he or she is jilted.
 

outdoorsNW

Involved In Discussions
#8
Thanks everyone for your quick responses. Below is a jumble of responses to various questions plus a few additional details.

The part is a higher end electronics item. I worked in the supplier’s industry until recently making similar parts.

I know of two other suppliers capable of making the part. Our buyers and engineers likely can suggest additional suppliers.

One of the few good things about customer mandated suppliers is you end up with a large stable of suppliers, so I expect the new supplier will be one where we have recent experience with similar parts.

As to leaving some work with the supplier, we have internal disagreement. Several people (including myself) want everything moved, but others disagree. Legacy parts would stay but new parts will go elsewhere.The argument is the incumbent supplier is capable of mid-range routine work but not difficult work that requires non-standard production methods.(Although the non-standard methods are not difficult and not expensive.) Sales are way up, so moving parts with no problems is not worth the time, according to some.

Other than this part and its close cousin, the two most difficult parts with the supplier, we have had few problems.

The supplier may be glad to loose this part because it has been a repeated headache for them. The supplier’s corrective action process is weak, and the supplier keeps going back to the standard way which does not work.

(A good thing about Elsmar. While writing the paragraph above, I realized I need to push hard for a supplier change.)
 

Golfman25

Trusted Information Resource
Trusted
#9
As to leaving some work with the supplier, we have internal disagreement. Several people (including myself) want everything moved, but others disagree. Legacy parts would stay but new parts will go elsewhere.The argument is the incumbent supplier is capable of mid-range routine work but not difficult work that requires non-standard production methods.(Although the non-standard methods are not difficult and not expensive.) Sales are way up, so moving parts with no problems is not worth the time, according to some.

Other than this part and its close cousin, the two most difficult parts with the supplier, we have had few problems.

The supplier may be glad to loose this part because it has been a repeated headache for them.
This is important information. Fact is you have given the supplier something outside his wheelhouse. Sounds like he's good at making nuts, but can't make bolts very well. It's beyond his expertise and a change is needed. That's perfectly fine and reasonable. If the guy is honest with himself he'll realize he's doing more harm than good and may even help with the transition. Let him do what he does best. Absolutely no reason to make it hostile. Good luck.
 

outdoorsNW

Involved In Discussions
#10
Wes, I have always appreciated your insight.

Being a small fish is part of the problem. My guess is we are 0.3% to 0.8% of the supplier’s revenue. We have started a project to consolidate suppliers, but that is a topic for another time.

I think we are overall a good customer to our suppliers. I know I am lucky to work for a company that does not expect me to squeeze our suppliers and blame them for everything. Having worked for the other side until recently, I try to treat the supplier the same way I wanted to be treated in my previous job.

We sell to the high end of the market and quality is usually more important than a few dollars cheaper.

Usual terms are net 30. I think we pay on time, except when a supplier ignores a request for return, does not meaningfully respond to several notifications, and the supplier fails to explain why they think the problem is not their fault.

Suppliers are notified of small problems, and are expected to fix the problem, but we only issue SCARs for big problems. Before sending a SCAR, I ask the buyer for a copy of what was sent to the supplier and verify the requirement was communicated to the supplier.

Shipments are not sent back until after the supplier is notified and has a chance to have questions answered, say we messed up, etc. We are good about admitting our mistakes and eating the cost. I don’t recall ever hearing about us sending something back without a supplier RMA.
 
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