The COVID-19 pandemic has disrupted many aspects of the global supply chain and it is likely that we will see a new approach to deal with suppliers. In this series of articles, Kusu management shares its best practices and recommendations to help our customers optimize their procurement process.
Our first article was on “How to mitigate your outsourcing risks”/ In our second article we talked about “Vertical Partnership and the importance of sharing the same values across the supply chain”. This third article is focused on how to best engage with your suppliers, whom to meet with and what to say.
When it comes to engaging with suppliers it is important to go to the right person and tailor your message to your audience.
The Sales Representative
Very popular in North America, sales representatives (“reps”) are independent agents (not direct employees) whose job is to find and grow customers for your organization. They are remunerated through a commission mechanism. They research the market for sales leads, open doors, negotiate on behalf of principals, win the business and follow up on orders. At Kusu we encourage our clients to secure direct access to the supplier without threatening the position of the rep. The rep needs to be reassured that his position is safe no matter what and you need to talk directly to your suppliers.
The Sales Organization
It is more than likely that your first contact with a supplier will happen through the sales channel. In many low-cost manufacturing countries salespeople are often the only ones who can speak English fluently and they will fill up the meeting room during your visit.
They are educated, well mannered, customer oriented but few of them are technologically competent, which is going to haunt you down the road. They are also young, inexperienced and not well connected internally. Your goal is to go through this early stage without offending anyone and without falling into the trap of the sales pitch. The success of your due diligence process is to go beyond the sales department and reach out to people who can influence things for you, often called the “movers and shakers”
The Engineering Team
Engineering are typically the best people to meet with for the sake of effectively assessing a company’s capabilities, predominantly because they are the most technically knowledgeable but also because most of the time they are the most candid individuals.
Assessing a company requires to cut through the sales pitch to determine if what the company is offering truly meets your expectations. Engineers will be your most reliable allies in this effort. And more importantly they will be there for you the day you are thousands of miles away.
The Manufacturing Management
The individual who enters the meeting room in his lab coat is probably coming from the shop floor and you should not ignore him. We are all too familiar with the inevitable tensions between sales and manufacturing. Sales is measured on selling as much as possible and the manufacturing strives to keep up. Understandably conflicts arise. So do not squander this opportunity to engage manufacturing people’s attention. Even if they are not as “polished” as your sales counterpart they have a lot to say when it comes to prioritizing one job over another.
The Executive Suite
At the end of the long process of vetting your new supplier make sure to meet with someone from the executive team, one of the true decision makers. A firm commitment can ONLY come from this group. In small companies it could be the owner or the GM, in bigger companies you may want to shake the hand of the CEO or the CFO. As a customer you want to ensure that your voice is heard from the top. If they don’t have time to see you it is a clear signal that the company is not customer oriented and you should not waste more time. Nothing can be more important for “the person in charge” than meeting with you, the customer. I have seen so many of my colleagues visit Asian companies and come home fully reassured after meeting a few nice sales persons in the meeting room…but it’s a rude wake-up call when they realize after a few weeks or months that their order is not delivered on time and the nice guy that took you to dinner, picked you up at the airport and drove you back with a large smile is not in the upper circle and has limited power.
From a salesperson through the engineering group and finally in front of the CEO this is your best chance to assess what the company that you are audited is truly made of.