Marketing Online

The company’s marketers should be interested in the company’s suppliers,
not just its distributors and dealers. One reason is to make sure
that the company’s purchasing people buy quality supplies so that the
company can deliver its promised quality level to its target customers.
Another reason is that undependable suppliers can lead to production
delays and therefore to broken delivery promises to customers.
A third reason is that good suppliers will provide value-adding ideas
to the company beyond simply supplying the product. Although the company’s purchasing people should seek the
best suppliers, they also are judged by their ability to keep company
procurement costs down. This pressure can lead to compromises in
the choice of suppliers. When Ignatio Lopez ran General Motors’
procurement, he treated the suppliers harshly, always demanding a
rock-bottom price even if this put some suppliers on the edge of survival.
This is shortsighted. One can guess that these hard-pressed
suppliers would favor the other auto companies when it came to handling
shortages or unveiling innovations.
Today most companies are reducing the number of their suppliers.
The thought is that one good supplier is better than three average
ones. Some companies have chosen to work with a prime supplier rather than playing off suppliers against each other in the
hope of gaining concessions. The auto industry has moved toward
using a prime supplier for seating, another for engines, another for
braking systems, and so on. These prime suppliers are treated as partners
who coinvest in the success of the customer.
And if you are supplier, be thankful when you have a demanding
customer. Rolls-Royce calls Boeing “the toughest customer we
have” and they’re grateful for it. By meeting the standards of a demanding
customer, the company finds it much easier to satisfy their
less demanding customers.