Let’s say you work for one of the finest restaurants in the city.
Customers love your restaurant because of the fresh locally sourced organic ingredients.
They come to you not because the prices are low but because they want something that tastes great and
fits their values.
As a procurement executive for the restaurant your job is to find suppliers.
What are you looking for in your supplier.
The typical knee jerk reaction is to say low cost but if you just went with the lowest cost would you
be working to make the customer happy.
When you go out and find suppliers you need to remember those ingredients aren’t being bought for the
owner or even the chef.
They’re being purchased to make the customer happy when they come to your restaurant.
The customer wants consistent tasting meals made with high quality ingredients.
They want meals that are available whenever they come to your restaurant.
Customers don’t want to hear that certain menu items are not available today.
And while he may advertise fresh local organic ingredients as a way to entice high end customers perhaps
local suppliers with excellent ingredients not only make customers happy perhaps they make our company
If they are really that good they may actually make our supply chains better and more predictable.
Food is one thing but how about electronics.
Suppose it’s your job to find a battery supplier for your company’s next generation cell phones cost
supplier location and ethical business practices may or may not be on your radar for these batteries
but you are definitely interested in issues like battery technology longevity and reliability.
High quality phones need high quality batteries.
You’re also interested in the shape and design of the battery.
Can batteries be made that will fit our phone design.
Another thing to consider is production capability.
If we plan on selling one million of these phones can they produce 1 million of the batteries all on
time all at the highest quality.
Can we trust them not to share information about our new secret phone.
Are they committed to improving that battery so that two years from now we can make an even better phone.
What would happen if your company decided to just go with the lowest cost supplier.
Would you feel confident putting the fate of your innovative phone in the hands of a cheap low quality
supplier that delivers late and gives away your intellectual property.
Choosing a supplier is a huge responsibility.
Is there a link in your supply chain.
A strong one or a weak one.
That brings us to one more issue.
Just like we count on our suppliers to keep us reliable.
Our suppliers are counting on their suppliers so more and more we are fighting that supply chain managers
who are responsible for partnering with great suppliers are asking prospective suppliers about the reliability
of their suppliers.
It really does begin to demonstrate that in the world the supply chain.
We really are all in this together.
So here’s what I want you to do.
Think about a big brand name company that sold you something rotten or cheap something that didn’t work
something you either returned or just threw out were the materials in that item will cause that item
If so think about how that company put their brand name in the hands of a poor supplier.
They lost you as a customer.
Probably lots of other folks too.
Because they chose a poor supplier.
Next time you choose a supplier.
Ask yourself Will this supplier help us be a better company.
Will they help me make my customer happy.
If not maybe it’s time to look for another supplier.
How does somebody pick out a great gift.
I’d say the best gifts are the ones that are very personal.
The ones that fill a very particular need in our lives.
Sometimes there are things we have desire for a long time but sometimes even better gifts are the ones
we never dreamed of.
The best gifts typically come from someone very special.
We understand the time and effort they put into it and while their sacrifice in getting you this gift
is appreciated we hope that they did not give more than they could.
A great gift will very often be the long lasting symbol of a friendship.
It can become a reminder that you are deemed special by someone you love and that they deserve the same
treatment in return someone else could have given you the same gift but it would not have meant as much.
The relationship drove them to get you the gift the gift drove the relationship to another level.
The best relationships between suppliers and buyers have similar characteristics.
The stereotypical relationship between a buyer and supplier might be buyer.
Send me stuff now.
Here you go.
I hope you’re ready for my next doctor.
Not a lot of love there.
Not a lot of collaboration.
Absolutely no understanding of their partner’s needs in modern supply chains.
The best companies understand that their relationship with their supplier is actually a relationship
and just like a great relationship.
Buyers and suppliers share needs one partner needs great parts at a certain time.
The other needs directions in a reasonable timeline to complete the order.
Reasonable expectations allow each party to plan and to establish reasonable timelines buyers and suppliers
also observe each other.
The most innovative suppliers want to see how you use their product.
The most organized buyers want to know what it takes to make those parts.
By understanding each other partners know what they can ask for and they also understand what they can
change to make life easier on you.
This is great for planning and innovation.
We also see that buyers and suppliers discuss their level of happiness.
Buyers use scorecards to communicate how they will judge their supplier and then they discuss the scores
to see where things are going well and how they can get better.
This probably wouldnt work with your spouse or friend but for two companies each with hundreds or thousands
of employees scorecards communicate expectations.
Communicate perceptions and they can start discussions about future needs.
That brings us to the next item.
Buyers and suppliers work together to innovate in our world of complex devices.
The next generation of products requires designers marketers and supply chain managers to work together.
And while it may seem odd buyers and suppliers are not exclusive having other buyers or suppliers makes
your company feel more stable.
It also gives you a wider view of the industry.
Plus buyers they collaborate with multiple suppliers they can motivate those suppliers through competition
that makes each of those suppliers better.
It also exposes the buyer to the different options for improving their products as a buyer.
When you work closely with your supplier everything they do for you is seen as a gift.
You understand the work they put into their supplies you understand their struggles to manufacture deliver
and improve products.
You also understand how they sacrifice every time they change to fit your needs.
You also hope that their business is thriving the stronger they become the stronger that link in your
supply chain becomes.
So let’s make this a lesson that we can think about throughout our lives.
Every time you get a wonderful gift I want you to think about how the relationship with that person
their understanding of your needs and desires and their individual strength and character makes their
friendship and their gift such an important part of your life.
And like a good buyer that just got a great shipment from their supplier.
Let them know just how much you appreciate them and their gift.