In the first part of this blog, I emphasized why it is important for component suppliers and contractors to take their cue from customers if they wish to establish a long-term relationship with one another. After more than two decades in the high-tech sector as a component engineer (during which I doubled as the buyer for many employers), I have identified many characteristics most purchasing professionals want to see in representatives they deal with at suppliers.
The list is not exhaustive, but if you want to make a big splash with a buyer at an OEM or contract manufacturer, I suggest you pay close attention to the following criteria, which I use in determining what I call the supplier hit parade.
- On-time deliveries:
The company does whatever it says it is going to do. Promises do not stock shelves.
The fewer calls I have to make to get products delivered, the happier I am. If a supplier says I will be called back with a stock status by 3:00 p.m., and I have to call the supplier after 3:00 p.m. to remind it about that promise, that would be a major strike against it. I always said that, if you are not going to give me a call by the stated time, please let me know, so I can adjust my expectations. If I get such a call, I am satisfied.
This is not so much respect for me as an individual, but respect for my time. If a supplier drops in for an unannounced visit, I probably have barely enough time to say hello and goodbye. If I inform the supplier that I have only 10 minutes, and it chooses that time to begin a long presentation, I would have to cut the supplier off mid-presentation and say that it would have been better to make an appointment. I would walk away from that experience not looking forward to hosting that supplier again.
No salespeople should sell any product that they don't understand enough to answer basic enquiries about it. Some components are very complicated, and most salespeople will not be able to answer technical questions if they are not application engineers. That is understandable. But if I ask general questions like “Do you carry RJ45s with magnetics integrated into the housing?” and hear answers like “I don't know. Let me check the catalog,” I immediately know that this person will never really be able to help me perform my job. Salespeople should know their catalogs forward and backward.
The MRP system includes in its forecast the lead times for individual parts and assemblies. In reality, these are moving numbers. If I place an order and a supplier says it can ship in two weeks, I expect to have the product in receiving in about two weeks, allowing for transportation time. If I have no product and no tracking number in two weeks and I have to call the supplier to expedite the order, I am not happy.
If at that time, the supplier tells me it will be another two weeks, I am upset. To meet my build schedule, I will likely have to go into firefighting mode and find another supplier. Spending time doing that means something else on my priority list is not getting done. That is two strikes against that supplier. It didn't make the shipment, and it didn't call to let me know it was not going to make the shipment.
If I get something other than what I ordered, I cannot build squat. I begin to think that the quality assurance program at the supplier is sadly lacking in the basic functions required for order fulfillment checking. This is a big strike if it happens once and a huge strike if it happens again. I cannot trust this supplier's internal processes, so I am going to slip it into the last position on my supplier list.
You knew that was coming. With all other things being equal, and considering the competitive nature of suppliers, cost can be a deciding factor, even if the first six items on this list are in good shape. Over time, all my qualified suppliers may have demonstrated an adequate level of competency and performance. In that case, cost and availability become the final differentiators. An exception would be, for example, if I am selling a microwave communications link at $50,000. If a particular capacitor costs six cents at one supplier and seven cents at another, the cost of the part is not going to be a deciding factor.
By this, I mean how many parts on my bill of materials (BOM) I can purchase from any one supplier. Vendor A has comprehensive coverage, but if I make this my only consideration, I am going to pay much more for my materials than if I purchased only my passives from vendor B. Still, the fewer reliable suppliers I need to complete a BOM purchase, the fewer phone calls I have to make, and the fewer vendors I need to track or expedite my purchased items. Additionally, the more volume I can order against a single purchase, the better my pricing will be.
Take these items, create your own scorecard, and let your supplier know it is being rated using a formal process within your company. It never hurts to send the results of your scorecard to your supplier contacts, so they have a consolidated feedback mechanism that informs them where their company stands within a very competitive environment.
If they get all an A for performance, they will know they are meeting their own company's goals as best as they can. If they get a D, they should not expect a lot of business from your company. Either way, you are showing that your company is watching and rating its suppliers, and that your business is setting a high standard for their performance.