Negotiation Strategies, Planning for Negotiations, Business Negotiation August 19, 2007

Good Suppliers Make Customers Better

In the July, 2007 issue of GLOBAL LOGISTICS & SUPPLY CHAIN STRATEGIES magazine, they report on their annual survey of the best suppliers in the transportation industry.

Out of the 1800 nominated suppliers they selected the best 100 and looked for what set them apart from their peers. The most common 10 qualities that users looked for in their vendors were:

Reliability (of course) --- "When a vendor has proved itself to be rock-solid, an enduring partnership is assured."

Repeatable excellence --- Good performance is expected routinely, but nearly a quarter of the finalists had a record of exceeding expectations on many occasions.

Value and cost savings --- This may be a good place to comment that you will not find in these top ten qualities any mention of lowest price, cheapest or lowest bid. The most important financial measure was creating value in increasing sales, production efficiency or other revenue related measurements.

Expertise and knowledge base --- Customers are looking to their suppliers to provide best practices specific to their market, product and industry.

Problem solving ability --- "Many of our nominations were based on companies that had experienced emergencies, but thanks to the supplier's response cost and delays were minimized."

Continuous improvement --- "Especially for technology vendors, companies want to see a plan for product development, so they know their needs will be met in the years ahead." Suppliers that help their customers be "first to market" will always be the least threatened in a competitive marketplace.

Support --- So many manufacturing and transport firms have experienced multiple rounds of downsizing that they now must rely on their vendors to do many of the functions they no longer have manpower to do. Winning suppliers now manage local and remote inventories, provide computer interfaces for the elimination of paperwork and quicker deliveries, assume maintenance functions……….

Positive culture --- The phrase most often mentioned in all of our nominations was "can do". "The greatest accolades were bestowed on those vendors that took on any challenge and found a way to accomplish a goal without complaints or excuses."

Global capabilities

Strong management --- Strong and long-term supplier leadership insures that no matter how many people in the selling functions leave and are replaced, agreements will be honored. In other words, there will be no erosion of commitment no matter who is managing the account.

I think these 10 winning characteristics provide a great checklist for self-evaluation, no matter where you are in the supply chain.

Remember, having all these positive characteristics does not matter much unless your other party is aware of them!