5 Ways to Improve Your Suppliers’ Performance

Tuesday, October 8, 2013 , Purchasing - Best Practices, by Rich Rafdahl

 

  1.  Most importantly inform them of what they are doing wrong?   I often find that certain key employees simply tolerate poor performance or problems because they feel they don’t have the time or leverage to straighten the supplier out.  I have also found, on occasion, that the supplier was unaware that their performance was less than expected until the buyer blew up or they lost the business. Every company and employee owes it to themselves to inform the supplier what you want and don’t want.   That is the first step in correcting the issue.
  2. DSCN0055Record and communicate the various infractions to the contact who can solve the problem.  If you don’t get satisfaction from your customer service person or sales representative, ask their manager to call you or meet with you – ASAP.  Often, this is all that is required to get the situation resolved.   In other words, measure, record and then inform the supplier contact who has the authority to resolve the problem.  Detailed and factual documentation goes a long way in dispelling any doubt in the supplier’s mind that you don’t have a valid issue.
  3. Ask your Supplier for more services and support that are important to your business.   Often suppliers can provide you with additional sales support, marketing funds, incentives, rebates, credits for unsold product, creative freight and inventory arrangements such as consignment or allowances as well as accommodating return policies on products not selling – to name a few.
  4. Ask for extended Terms and additional incentives.  If your company has been paying on time and/or your business has grown with a supplier over time, you have every right to ask for better terms such as 2{fd764c423169b107d7473585cb974f0964537b0b8c5dab730771f487497f0bbc} net 30 or net 60 day or some other preferred discount.  Regarding incentives, if your business is growing and a product line or service you purchase has grown accordingly, you can request a quarterly rebate or additional discount that is tied to volume thresholds.  These are just a few examples you may want to consider.  The point is that you will never know what is available, if you don’t ask.
  5. Be aware of your Suppliers Overall Performance and then Leverage that knowledge.  Contact your Sales, Payables, Receiving, Warehouse and any other departments who may be impacted by a supplier in question.  It is always good to keep you finger on the pulse of your suppliers performance.  Sometimes, you may find a certain supplier that is notorious for inaccurate invoices or frequently ships the wrong product or paperwork – which requires a lot of time and effort to correct.  Again, your supplier represemtative may or may not be aware of these issues but the more aware you are of the real issues and their true performance the more leverage you have to negotiate reduced pricing, postpone a potential price increase, improve their service level or secure better terms which could help offset the inconveniences they have created.

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