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

Wes Bucey

Quite Involved in Discussions
#11
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.
Good to learn! We Demingites devoutly desire that more companies would adopt such an attitude.


In essence, the open secret to good supplier/buyer relations is making BOTH parties feel (and act like) they are partners in satisfying the end customer.


Some hardnosed folks still living and thinking back in the early 20th century think of many Demingites as too "touchy feely" when the truth is that supply chains which take a holistic approach where each link is "part of a whole" rather than a stand-alone fiefdom are ultimately more profitable than those which take an adversarial approach in dealing with the links above and below them in the chain.


I shudder to recall how many automotive OEMs badgered and bullied the links in their supply chains which allowed overseas competitors to come in and eat their lunch. Ultimately, it became plain to prospective customers that some automotive OEMs didn't care much about their retail customer (similarly to the lower links on the other side of the supply chain) other than whether the check cleared.



In hindsight, is it really so hard to believe that the customer would go where he was apparently respected and wanted?
 
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Mike S.

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#12
In essence, the open secret to good supplier/buyer relations is making BOTH parties feel (and act like) they are partners in satisfying the end customer.
This is very important, no question. Starting off with the adversarial approach is just asking for trouble. Much like a marriage, there needs to be forgiveness, fairness, give and take, and lots of communication.

But, like marriage, sometimes ya just gotta sever ties. Some companies change and become awful suppliers. But like others have said, be SURE you have a good alternate supplier before jumping. My policy is do not tell or terminate the bad supplier unless and until you are sure (via repeated deliveries from the new supplier) you don't need them or unless you have a solid 3rd supplier. Even then, I prefer to just stop giving new orders and not make a big deal out of telling the bad supplier. Someday they may be needed, and they may improve.

I recently had a supplier who went from good to bad to awful over a few years. We tried everything to help, to make it work, it just never got better. We spent tons of $ bringing on a 2nd source. Turns out they were worse than the 1st supplier! :bonk:
 
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