What suppliers say about buyers

by Ed Rigsbee

Some distributors are more concerned with their relationships with suppliers than with their customers. Without suppliers, distributors are out of business. It's an important question: How important are your suppliers?

The following is excerpted from Ed Rigsbee's book, PartnerShift-How To Profit from the Partnering Trend.

At the Building Service Contractors Association International’s 1997 CEO Seminar in Los Cabos, Mexico, one industry supplier gave a presentation based on what suppliers in general said they did not like about contractors (their customers).

While Rob Kohlhagen, senior market development manager at SC Johnson Professional delivered an exceptional presentation, I’m not sure he ever forgave me for assigning him the task.

Admitting the comments come from only one industry, I believe they are universal; they apply to most of the industries I have counseled or studied.

Power manifests through knowledge. It is important to know what your suppliers have to say about you.

Three general areas of complaint from contractors’ suppliers are listed below along with some of the specific comments offered about the contractors.

Their comments point out universal issues suppliers have with their buyers. Most will apply to your industry. If you explore issues you might have with your own customers, there is a good chance your suppliers could have similar issues with you.

Fear of commitment
• “They are not willing to single source but still want our total bundle of value-added resources at no additional cost.”
• “They focus on reducing price rather than reducing cost.”
• “They like to shop around regularly to satisfy curiosity...they are afraid that we will abuse the relationship.”
• “They want direct prices but local service.”

Operations level support
• “We get commitment from top management but the program gets derailed at the operations level.”
• “Top management is reluctant to mandate changes to operations...they try to build consensus but it doesn’t happen.”
• “Operations people have their ‘personal favorites’...old recipes they swear by that they will do anything to hold onto (including sabotaging the partnership initiative).”
• “The partnership is conceived at the executive level but the lower level departments are never convinced that it is in their best interests too.”

Communication breakdown
• “Everyone is so busy we only communicate when there is a need for fire fighting...the relationship takes on a negative tone over time.”
• “We never discuss mutual opportunities...it’s always, “How do we fix what isn’t working?’”
• “We talked about the importance of communicating at all levels: executive, operations, purchasing, training, risk management and quality assurance. But there is no structure established to make it happen...so it doesn’t.”
• “The chemical supplier cannot partner independently with the building service contractor. There is an interdependence between the chemical and equipment and supply manufacturers but there is no communication link established between us.”

Interdependence is an idea that carries much power. From the Harvard Business Review, July/August 1994: “Active collaboration takes place when companies develop mechanisms, structures, processes, and skills for bridging organizational and interpersonal differences and achieving real value from the partnership. Multiple ties at multiple levels ensure communication, coordination and control...more communication than anyone anticipated is necessary.”

Developing a conduit for communication is not difficult but frequently overlooked in many industries. The Internet makes this even easier. Some industry associations are providing this service through members-only sections on their Web sites.

More trade and professional associations are helping to create this type of multi-function participant forum, but not enough. This area is a tremendous opportunity for associations to add a very high-level of value for their members. Continue the dialogue with all stakeholders in your business.

Adapted from PartnerShift-How to Profit from the Partnering Trend by Ed Rigsbee, CSP, published by John Wiley & Sons, New York, October 2000. Ask for PartnerShift at your local bookstore or available from Amazon.com.

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