What do customers really want from a supplier
How many business pages are published on LinkedIn which begin with a brief origin story before developing into some kind of chest beating pomposity of how fantastic they are?
This approach must be considered standard practice, yet It belies the notion of how each company is actually perceived by projecting their own narrative of how they would like to be seen.
Every brand is going to present their business as the best, no one is going to state they are “good most of the time” for fear of diminished optics.
This goes straight to the heart of the failure to manage expectations of their clients and customers.
Everybody is seemingly stuck on transmit rather than allowing critical messages and communications to be received which will allow them to improve their own performance.
This is not just negligent on their part it can be fatal, why wouldn’t a company/brand want to hear how they can improve?
Why would they not hold review meetings as to how each account is performing or not as the case maybe, there is always room for improvement.
Rather than construct a section of how great BHI are, let us reverse the position and look at key evaluation points from a customer’s point of view.
What do customers want and more pertinently what do they need but may not know it…yet.
This approach is applicable across almost every industry however for the purposes of correlation we can view the scope through the narrow lens of the PPE, Workwear and clothing industries.
A major challenge every business faces is evaluating suppliers to determine their value and level of service.
It may be worth noting that the primary factor used in assessing new suppliers can be the most fraught with problems and false economies, I am of course concentrating on the “Price”.
The price is not and has never been the cost, yet it is the single most focused area buyers and sellers have focused upon.
Now I’m not trying to say that price is unimportant, far from it, however, I am pointing out that focusing solely on price as the determining factor can be myopic and may lead to increasing the cost thus inflating the price.
People with a purchasing background will have experience of procuring products with a seemingly great price at the outset only for it to diminish as you proceed.
The adage of “You get what you pay for” or “Buy cheap, buy twice” springs to mind.
The reason price is held in such high regard is due to the extremely effective way it can close the deal.
The seller secures the deal almost at any “cost” and the buyer believes they have secured better deal which offers the most value for money.
Let BHI highlight what you should look for in new and exisiting suppliers
Both of these principles are fallacious in nature.
Even if the figures add up, the seller will make less margin on that contract and if they are undercutting competition or negotiating purely on prices as a standard sales pitch they will be working precipitously harder, not smarter.
Operating at lower margins is unsustainable and seldom calculated in that narrow margin is the ancillary costs of doing business, overheads, expenditure, liabilities and other opportunity costs of selling goods and services at the lower price.
However, these suppliers feel by engaging in this approach they are taking business from their competitors. What they don’t seem to factor in is they will have to secure more business (quantity) to increase the margins back to targeted levels which equates to them being busier - busy fools in some cases - and as they become busier they will have less time and attention to concentrate on managing their existing accounts (quality).
This endeavour in turn fuels the cycle of those frustrated and disgruntled accounts seeking other suppliers all for the process to begin again.
is this the best way to operate? Is that what you would want from a supplier?
From the buyer’s perspective the lower price will almost certainly not guarantee great service like the reason above the supplier will still have the overheads and operating costs such as salaries and fixed liabilities.
Operating at lower margins will stretch the supplier’s resources as there will be less elasticity to hire more staff which could further dent the already reduced gross profits further so in this example the existing staff will have to increase their “productivity” which is oxymoronic.
The staff must “complete” more tasks to cope with the increase in demand and no increase in capacity which places strain on the internal systems and procedures.
This principle is exactly how mistakes begin to happen contributing to frustrations and delays in turnaround, missed deadlines, damaged goods, incorrect products being delivered and disruption to the customer’s plans.
After these points the question should be:
How can you evaluate whether a supplier is going to be reliable, valuable, and make your life easier?
There are several critical elements a company should look for when selecting new suppliers.
Price – We have already explored price in a broad sense above but there are is another process we would like to highlight here – Tender processes.
On paper tender processes seem a good idea however in practice these “simple” ideas can become absolutely unmanageable for all concerned.
This could be down to miscommunication of the requirements or more pertinently misinterpretation of the requirements from the supplier.
It could be down to suppliers wanting the contract at any cost for them to worry about their true costs later.
A wise man once said of tenders, “those companies who win tenders made a mistake in their pricing” – This is often the case and as discussed above can lead to mismanagement and frustrations in the level of service.
Next there can be the issues a tender process causes when presented with samples after prices have been submitted.
There are a great deal of suppliers who conflate products and services with the ones specifically prescribed in the request for tender (RFT). We have heard examples of specific garments being tendered. For example, we have heard that a bespoke Hi Vis polo shirt being requested by the tenderer was presented with a product at a very low price, the product, as it turns out, was a standard yellow polo shirt which would not conform to EN or ISO EN specifications thus not for fit for purpose.
I bring this example up as the price was right but when the samples came in the product was wrong which lead to the customer having to move onto the next proposed product and so on.
This prolonged and common occurrence impacts the operating costs the tendering company. Conducting tenders is not a cheap or cheerful strategy and further delays or “mistakes” in sampling results in more costs incurred for every additional day or week they must wait before acting on the “best” candidate.
The tenderer may be spot buying at premium rates or worse they are operating with diminished and substandard PPE and garments.
Tenders appear to be a box ticking exercise, performing due diligence however with incomplete elements to factor in the conclusions may be flawed.
Tenders can work but people involved in tender processes are extremely wary of undertaking them again within a short period of time.
The golden rule here is: Do not make the mistake of conflating price and cost they are most assuredly linked but intrinsically both mutually exclusive
It may behove a progressive thinking company to seek alternative solutions to tenders or have a longer-term view that after an initial tender process, resulting in satisfaction, to establish an ongoing contract with their preferred supplier.
This does not tie a company into a long contract and still allows comparisons to be evaluated within and without placing an emphasis on great service and economic value for both buyer and supplier.
Great Service – This element offers huge beneficial advantages, but it is a factor which is often overlooked in the pursuit of the lowest prices. However, every contracting company expects a good level of service regardless of the pricing.
This is typically a bone of contention for buyer and supplier, but, it is one element which it is critical to managing expectations as the supplier progresses.
If there is an unanticipated delay in turnaround time or a stock issue these need to be expressed explicitly to ensure expectations are met, to avoid conflict and dissatisfaction in due course.
The amount of people we speak to about the lack of communications regarding replacements, alternatives and 4+ weeks for embroidery jobs it is frightening.
From a practical sense it would be better to advise a longer period just to cover the unseen circumstances however if the supplier delivers sooner they will be “heroes” as opposed to the “villain” if they under estimate.
As detailed above low prices may result in a poorer level of service and given the choice of paying a little more to receive a greater level of service many buyers may pick the better service option to make their life easier.
This should be considered in the true cost in the evaluation of dealing with suppliers.
Buying workwear and PPE for example can often seem the most important, least important job on anyone’s desk.
The question is how much would someone pay to take aware all the stress and challenges associated with buying products and services?
Reliability – Very much linked to great service, reliability can cover a varied array of subjects from turnaround times, continuity of supply, great pricing etc.
The most critical element is the relationship between buyer and account manager as this will often be the main point of contact when issues and problems arise.
With the best will in the world each supplier will be hostage to the fortunes of other companies in the sourcing, production and shipping practices but if they have their own operations working in a cohesive manner the potential problems will be mitigated.
It should be considered best practice for a supplier to view challenges as opportunities to prove their worth in the customer eyes. This could be from sourcing alternatives, solving multiple issues in one hit, re-enforcing their ability to take the pain away from the customer allowing the supplier to “do the legwork” as it were and present the client with 2 or 3 alternative options clearly and concisely.
The customer should feel assured and comfortable that their chosen supplier will fix the problems regardless.
This approach is priceless as it fosters loyalty and confidence that if there are impediments that they will be overcome at minimal disruption to the client.
Solution Based – This is an obvious principle to look out for, yet it is one that a lot of suppliers fail to execute to a satisfactory level.
Most suppliers are caught in the trap, highlighted above, of focusing on prices as the main way in but this doesn’t guarantee their longevity.
A great supplier will offer better methods and products matched to the operational requirements, they may not be successful in their presentations but at the very least they are identifying possible better ways to proceed.
If a company had been buying a particular cut-resistant glove would it serve as a benefit if the supplier highlighted that an alternative would be adequate and cheaper?
Backed up with facts and evidence this process could save the buyer a great deal of money.
If we reverse the situation where the supplier sees the possible “danger” or potential impediments would be beneficial if they identified this and provided the correct solution?
An example would be damaged Hi Vis garments whereby the literal safety of the worker is at stake and secondly the company is at risk of fines and civil or criminal damages for negligence.
These issues should be picked up by H&S officers if they spot the infractions, but this is not always practical if the workforces are spread over multiple sites.
Wearing damaged or discoloured hi vis garments can lead to fines from the HSE or worse to incidents and even deaths.
As we move further into the electronic age more and more companies are demanding online solutions which saves time and should make the buyers lives easier if they can simply login and order the right products at the agreed prices with no additional fuss.
Logos are taken care of, multiple shipping locations are stored and easily added, full reporting, quotes for new potential products can be added and most conveniently a “man packing” feature for easier distribution of the products when they are delivered.
What would you pay to have a solution that fully allows the buyer to spend the least amount of time required to build an order which will arrive as requested in separate packages labelled with each employee’s name and identifiers for easy distribution?
This service would remove the free for all and first come first take scenarios where there is always someone left with the wrong sizes.
In summation the details discussed above should serve to highlight the preferred assets you should seek when evaluating any new supplier and more over this article should serve to highlight what the undesirable traits are from existing suppliers to either push them to accommodate the elements above or for you to use their service against them and move to a supplier who can meet your needs in a more efficient manner.
Call BHI Workwear today to discuss how we can make your life easier and more cost effective- 0333 101 4030