In business, we all get comfortable with existing relationships. You know each other’s needs, egocentricity, pet peeves, and requirements. You have done this in the past so why can’t you do this in the future? You tell each other what they want to hear not really what is happening.
As you get comfortable in the relationship you may notice things changing in the relationship, the communication, the efficiency, the quality of the product and deliverables.
Sourcing and Supply Chain
This highlights the importance of continuous sourcing and constant improvement of your supply chain to better your image, your brand, and products, to elevate your relationship, product, and people from mediocrity to greatness.
Starting with a new supplier is always a challenge, as you need to work through the pains of a new relationship. In an ideal world, you should be providing all new suppliers with hands-on training and in-person explanations of your policies, processes, procedures, manuals, workbooks, internal culture, and external community expectations.
Qualifying New Suppliers
Understanding the new supplier’s internal structure, program management (merchandisers), quality assurance, quality control, allocation, and systems or lack thereof is of the utmost importance to help with the relationship development, trust, and transparency.
It’s a lot to absorb, so be patient and persistent, continuous training, and reminders of expectations and needs. Their culture, the language, their expectations are different than yours and they have many types of customers to please.
Below are some reasons you may want to look at your options for sourcing and supply chain:
- Find new vendors, the improper allocation is a huge problem, find specialists for products you want
- Find multiple sources, engage several suppliers, reduce costs, improve allocation, find the best one for you
- Pricing, see what price is being charged elsewhere, negotiation, are they willing to work with you?
- MOQ, see what others are offering
- Capacity, does this factory have capacity? are they outsourcing?
- What are your alternative suppliers, if your current supplier cannot meet your needs?
- Lead time/delivery, what is their offering, what is their success ratio?
- Quality, their processes, documents, and management or lack there-of
- Technical knowledge, what’s their depth of understanding? Do they know what they are talking about?
- Optimize Performance, track and measure performance, be proactive, not reactive
- Mitigate Risks, qualifications, certifications, and financials
- Business structure, what is the vision and values of the company
- Business practices, do they believe in Kaizen and Six Sigma Lean initiatives
- New Product Development & innovation, see what others are doing, idea vetting & generation
- Protect your brand, your company brand(s) that hold a lot of value, be careful not to use a supplier that can tarnish your brand by unprofessional manufacturing, compliance, standards, or unethical allocation
It is wise to be very thorough in your approach, making educated decisions that provide proactive solutions to reduce costs and increase revenues.