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When a Supplier Goes the Second Mile

When purchasing goes into action, it goes to its Tier 1 suppliers first. Tier 1 is not always a function of size as much as it is a rating of performance history. Nothing is more irksome to a buyer than being told a component is available and then discovering that is not true.

“Yes, we have it in stock, and we can meet your delivery requirement date” is the No. 1 response a buyer is looking for, not “We had it in stock when you called, but someone must have taken the inventory the same day you asked about it” or “Our computer said we had the parts, but the stock bin was empty.” Too many of those kinds of responses leave a bad taste in the buyer's mouth.

In an earlier article, I wrote about the supplier scorecard, not just for qualifying a supplier, but for grading its performance over the long haul. (See: Supplier Hit Parade, Part 2.)

If purchasing returns to the same supplier continuously, it is either because that source has been very reliable or because it is the only source for the parts required. In the latter case, until an alternate part is identified and qualified by a component or design engineer, purchasing is over a proverbial barrel. This is a strong case for making sure purchasing has alternatives for as many parts as possible. The stress factor is reduced by an order of magnitude if an alternate part is on the item master list.

So credibility gives a supplier a very basic competitive edge. I would use the term “veracity,” but that would be a judgment call, assuming the supplier is prone to lying about product availability status. Credibility is earned over a period of time marked by consistently good performance. All buyers know who they can trust to come through even if things go wrong. No supplier is perfect, but that brings us to the second competitive edge. A supplier that goes the second mile in helping the buyer meet requirements, even at the expense of its own immediate gain or interest, has earned return business.

This may sound unusual, but there are some really great inside salespeople who may offer support by providing a name and contact information for a competitor's product. Now, this worker has just communicated that he or she has identified with you as an individual with a real need. This person also might have the business savvy to know that, if he or she helps you out of this jam, you will be back, not just as a repeat customer, but as a grateful human being.

Every supplier knows its basics, but basics make you competitive only in an environment where there are a bunch of poor performers that don't practice the fundamentals. As in any competition, the superior performers earn the top prize. As I said earlier, this is known as “return business.”

Your company's buyers help your suppliers by giving them the feedback they need to know where they stand with your company. Use the scorecard, but also take a moment out of your busy schedule to call your suppliers when you don't need something from them. Let your Tier 1 suppliers know how pleased you are with their performance. Call the inside salesperson's boss to say how great that salesperson is doing for you and how much you enjoy doing business with that company. Follow up that conversation with an email, so the supervisor can forward it to the person who has earned your praise.

Who knows? The next time you find yourself needing a second-mile effort, you may get a third-mile solution.

5 comments on “When a Supplier Goes the Second Mile

  1. Barbara Jorgensen
    July 19, 2012

    Douglas: You identified a phenomenon that speaks to everyone's goal in the supply chain: collaboration. If a customer is important to two suppliers, meeting the customer's needs is No. 1. Yes, one supplier may not get that particular sale, but it could get a loyal customer for life. There are lots of competitive reasons for suppliers (and other supply chain partners) not sharing information, but if a need is identified and someone responds, isn't that truly what collaboration is all about?

  2. ahdand
    July 20, 2012

    I think if they can go a second mile for thesake of sucess, we as developers should be able to another extra mile to make sure the expected sucess of the supplier is met on time

  3. stochastic excursion
    July 21, 2012

    The topic of maintaining a friendly business relationship with suppliers reminds me of the times I used to see Carrie from Arrow down at the local roadhouse!  Seriously, conscientious business people make a point in repaying generosity in time and favors, and this can be many times the value of the initial gesture.

  4. dalexander
    July 24, 2012

    @stochastic, I know what you mean. When you can make a friend of a supplier's contact, that is a good thing. When you leave a company and the contact helps you find another opportunity, that is a better thing. When you go to a new company and remember your contact and bring business his or her way without compromising the company's best interests, that is a great thing. When you can return a favor, that is the greatest thing. I have been very fortunate to have had some amazing good supplier contacts and representitives. Many of them, I regard as personal friends now. The best relationships are the ones that last.

  5. ahdand
    August 6, 2012

    Yes this is where the after sales value and the CRM value do come into play.

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