Our supplier is a family-owned business, who's not always professional, i.e. very delayed responses to urgent questions, last minute price changes, etc. We deal with the Sales Manager but suspect the owner is behind these problems. Replacing this supplier is impossible because they have a unique product our clients demand. FYI they're in a developing country that differs from typical Western standards and behaviors.
There are 2 ways you can proceed.
1- Keeping the same supplier but improving the process.
2- Changing the supplier
The first choice and the most feasible way is to proceed with option 1 above. I assume you are far away from the supplier so it is not easy to visit the supplier anytime. Probably all the warnings, phone calls, e-mails aren't effective to change this kind of an attitude either. In this case, you can hire a local company or person to be your front face and run the project on behalf of you. Visiting your supplier regularly, giving more pressure and solving the problems and getting answers at the site directly.
And the worst case, even this may not work. If they are not willing to do the things you request, not willing to improve, then they really don't care about the business. Being in the manufacturing industry so long, there is one thing I learned that if the supplier is really not willing to do something after all the trials, efforts you make, just stop wasting time on it and move on to another one which can fit you better.
One important question here, does the design belong to them or you? If it is your design, you should get this design and move to another manufacturer. If the design belongs to your manufacturer, for sure they won't give it to you. But they are also not willing to improve your business and communications. Then do let them kill your business. Do your own design and choose your own manufacturer who is really more professional, willing to work with you.
Either way, make a change asap, don't wait for your business to be affected.
Let me know if you have any further questions, we can hop on a call. I am happy to help.
For a thorough solution to your interesting problem I'd consider the following:
- Who introduced you to this supplier? Maybe that person/institution has some leverage/advice.
- Also: find out the reason for their unreliability. Do they just not value your business enough because it is too small or not very profitable for them? Or are they generally disorganized and used to customers accepting that because their product is so unique? Or is the company failing and won't be around in the near future?
- To generally increase accountability I'd try to introduce a new communication tool that tracks exactly what was agreed on, when, how, between whom. I don't know what business you're in and what your future aspirations are. But if you plan on growing big and manufacturing a lot abroad maybe a blockchain application could help you administer your supply chain.
- Because once you have more accountability you can introduce a bonus-malus system with the necessary rigor. E.g. if delivery comes through until date x, you pay full price. If it comes after x you pay only 80% etc.
- To have leeway when negotiating such things with the manufacturer you do need to have an alternative to him. I don't know what product your dealing with, but reverse-engineering is a thing.
- Would be interesting to know which country this is in, because a) maybe there are some groups you could unite with that have similar interests to yours (e.g. other customers of those kinds of suppliers or state actors that want to further business) and b) country-specific cultural issues (re: communication between you-sales manager-owner) might be worthy considering before taking any further steps.
All the best and good luck!
This is the perfect time of the year as new year, new chapter and you can put that as a context of how to start the series of conversations.
Schedule a time and thank them for the collaboration and that you want to do a catch up call. Write out a rough outline and come from a place of collaboration.
On the call.. focus on the fact that you are small businesses and this year you want to take the relationship to the next level.
Understand where they are coming from and what challenges they face. Sometimes with price changes can be impacted by variable costs that may not apply to where you are.
And then plan a 30 and 60 or 90 Day plan. The shorter the better s for incorporating system in a developing country is different ball game.
Happy to jump on a call and help you figure out the right game plan while getting more context
Hi, as described in your question, you do not want to end the relationship with your supplier.
In such a scenario, following points would be beneficial for your business.
1) Tell your supplier about the business you have to offer to them in the coming months (current orders in-hand).
2) Give them the visibility of your demand forecast for the next 18-24 months. I am assuming that you have anticipated certain growth in sales for the coming years.
3) Show them charts (reports) on your delayed orders due to any reason from your supplier's end.
4) Tell them how your business got affected.
5) Negotiate the best prices with your supplier based on quantities you want, considering the economic factors (you can use any of the available tools for the material planning).
6) Offer them the support, if they need any (like technical assistance, employee training,etc).
7) Show them that you are taking them as a serious business partner.
I hope above steps would help you, would be glad to help you on call for any assistance required.
1. Try to understand whether they supply also others, and if so how important are you for them.
2. Try to understand whether that family has any other source of revenue.
3. Try to understand the culture and behavior of that nation. Learn history, traditions, believes. Relate those to the same of your country.
4. Go and visit that family. Do not rush to the business issues, but evolving on 1., 2., 3. try to create personal relations.
only then, go to
5. Explain the business issues and try to get common agreement.
6. If those steps are not fruitful, then either:
a. make provision in your price for all uncertainties
b. buy in bulk and keep on stock