It all starts with trust. Customers must trust the vendor to have their best interest in mind and vice versa. How do you establish this? What does the customer want and how does that differ from what the vendor wants? Can you bridge the gap? YES and here's how.
First, let's establish the top few things a customer may want from their vendor:
QUALITY PARTS, without doubt. Without quality it's a non-starter but also a system in place (QMS) to deal with things that come up because nobody is perfect.
ON TIME DELIVERY but also as quickly as possible, well sometimes. What do you mean? Vendors need to be on time with confirmed delivery dates but also flexible to move jobs in and out based on customer's schedule. Remember, you are in service to the customer.
PRICE! Customer's just don't want you to be competitive they want the best price! I will explain how to get there. It takes work on both sides of the aisle. Customer's don't want to feel as if they are overpaying for the part or service. Nobody wants to be duped, tricked, or taken advantage of. Therefore, establishing a trusting relationship is key. I will explain, but before that, I have one more to add and then we will flip the table and talk about what the vendor wants from the customer. This is going to get good.
GOOD COMMUNICATIONS, when issues arise with delivery and quality. Let's face it , it's going to happen, let's get over it. At K Tooling we have a 95% on time delivery and a 99% good quality parts to customers but we are not at 100% so S**T happens. I still have bad parts that sneak through and jobs not on time no matter what I do. Customers want to and need to know bad news ASAP, it's easier to digest in smaller bites. Vendors fail at this most often, we have too, but not anymore.
Now let's talk about what the vendor wants. Stick with me on this because it is the truth:
HIGH PRICES, there I said it! As a business I need to make as much money on every job as I can. RIGHT!!! Yes but wait a minute, if a vendor is thinking short term then over charging might be the focus but it will never last. I'm going to dive deeper on this but for now we all realize that if a part is over priced it's going to be discovered and the vendor will loose the job. It's called competition and it's everywhere so we can't escape it. What if I told you that the relationship I have with my customers, competitive quoting or reverse auctions are not necessary. If you look at price differently, we all need to make a profit and in a trusting working relationship customers realize this, they just don't want to be "ripped off", a fair profit is ok. (What is fair? We will discuss) Vendors need the profits, obviously, capitalism, we are all in it but dig deeper. In many cases vendors need high profits on some jobs to cover the losses on other projects. Misquoted items, overruns, “I quoted the job for 10 minutes and it’s taking a half hour” who hasn’t experienced that before. Vendors are often afraid to raise prices because the customer is more likely to jump ship then to work with the vendor. After I'm done with this topic, it will not be a factor between customer and vendor.
ON TIME DELIVERY, yes vendors want that too, but the road is sometimes bumpy. Juggling all the balls in the air from purchase order to shipment can have hurdles but we can agree that vendors want to deliver the product on time as much as the customer does. What the vendor wants in addition to that is customers to plan ahead and place orders early to absorb shocks to the system.
QUALITY, ok so we are all in agreement. For the vendor the path to perfecting quality is process, with systems (QMS) in place, providing the structure for everyone to follow. The proof is in the data. Vendors need to measure their own performance and correct the areas that need correcting, it’s ongoing. There is a cost to that, and how does that translate to the customer? I will explain.
FAIRNESS, Ethics, there is a code to live by, if you break it, then you have chosen to forsake the trust between us and all is lost. What is ethical and what is just “business”. Wait for it, we will get there!
If you trust your vendor and the vendor trusts the customer, then what are the barriers? How do we remove them? Over the next upcoming months I will guide both the customer and vendor on how to do it. There will be some surprises along the way and concepts to wrap your head around, but if you can get it, you'll foster the best relationships you will ever have. How exciting is that! It just may work in real life too.
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