The Low Tolerance Spec

The United Seal & Rubber Co. Blog

Act As One Company

Posted by Virgil Alonso on Mon, Oct 21, 2013 @ 09:10 AM

Partnership as defined by Dictionary.com: the state or condition of being a partner; participation; association; joint interest.

A popular phrase in B2B sales is to form a partnership.  I'm not talking about using the term partnership as in company ownership.  No, I'm referring to a partnership that is formed between a supplier and their customer(s).  Like most phrases that become popular, partnership is spoken often but are the parties involved really forming a partnership?  Or is the partnership too one sided, favoring one party over the other?   A partnership must be two sided and act in favor of both parties.  If two companies wish to create a true vendor-customer partnership, they should think and act as one company.

 

To act as one company, the first step is to build trust.  There have been multiple books written on the subject of becoming a "trusted vendor".  Most of today's sales gurus preach this sermon often.  However, equally important to the partnership equation is that the supplier should build trust in the customer.   This become a win-win for both the supplier and their customer.  Early in my career I was able to achieve what was a true partnership with a customer, one in which we acted as one company.  I would like to share that experience with you.

 

I began working with a local company early in my sales career.  Honestly, my predecessor had ignored this company.   He had focused on a company that was close by and represented a large account for our company.  The company I began to focus on had migrated to the south but still did business with a supplier in the Midwest (the original co. location).  The purchasing manager and engineers wanted a partnership from their supplier but there wasn't much of a relationship with their Midwest supplier.  They were treated as a "house account" and the supplier was happy to accept orders but no longer offered support beyond the very basics.   This company was very engineered driven and constantly developing new and improved product designs.  They needed support and a solid vendor relationship for their rubber product requirements. 

 

I started off by working closely with the engineering department on new designs.  As we developed a strong level of trust in each other, the business grew to include existing products (products they bought from the before mentioned supplier).  The purchasing department had built a level of trust too but old habits were hard to break...  The buyer would send out RFQs to 4 or 5 vendors, including myself.  I would always get a final look but there were times I just couldn't meet another supplier's price.  There was one particular time in which I couldn't meet a target price and it seemed very strange that my target price was as low as it was.  It was this particular situation that would become the turning point for us.  We were on our way to acting as one company.

 

The orginal buyer left to go to work for another company.  The individual who took the buyer's place knew me from his previous position with the company and called me in for a meeting.  His message to me was that he met with the engineering department and that they all agreed that they valued the partnership we had formed.  Furthermore, he didn't have time nor did he find it necessary to send out RFQ's to 4-5 suppliers.  His plan was to maintain 2 rubber products supplier and I would be his primary supplier.  He had complete trust in me.  He gave me a PO for the parts I mentioned in the previous paragraph and explained that the supplier of these parts would not be a vendor moving forward.  He knew my price was higher but he stated that he had trust in me that I would offer a fair price and support engineering efforts. 

 

I can't end this blog article without finishing the story I mentioned in the previous two paragraphs.  I quoted and produced parts to the specifications the engineer had supplied.  I mentioned that it was a mystery to me why my price was double the price of their previous supplier.  The mystery would soon be solved!  I got a call from the engineer stating my parts had failed in the field.  I drove over and met with the engineer and buyer.  My parts were to print, both tolerance and material callout.  I asked if the engineer had any of the gaskets that the previous vendor had supplied.  He did and upon seeing the samples I immediately knew what the problem was.  There was a tell-tell sign that the material they supplied wasn't the material that the engineer had asked for.  Further investigation into the material certification indicated that the supplier had not provided what was called for per the print.  In this particular case, the substituted material had worked while the material specified on the print failed (rarely the case).  The problem was, all of the intial testing was performed under the trust that the vendor supplied the material specified on the print.  I provided parts to specification under the assumption that the parts my customer tested a year earlier were also to the drawing specification.   In the end, the print was changed to reflect the material that had been tested and worked for their application.  I was able to offer a lower price than what they had paid to the previous vendor (again, mystery solved!).  Together, we acted as one company.

 

 

 

 

Tags: Value Engineering, Quality Control, Vendor Selection