Are your suppliers untapped, overlooked resources?

Published in: Printing Industries of America, Inc., Sales & Marketing Advisory, October 2001

In today's soft economy, most of us are looking for new opportunities that can have an almost immediate affect on our performance. However, many of the resources that most impact our company's performance aren't on our balance sheet -- our customers, our employees, and our suppliers.

In looking for these opportunities, some companies have conducted major supplier surveys every 15 to 18 months. Results have proven, at times, not only dramatic but startling as well. The survey questions are meant to uncover additional resources that have the potential to improve new business development and increase bottom-line performance for the printer and its supplier.

Do your suppliers have overlooked resources that could be used to your company's advantage? Are there untapped opportunities waiting to be uncovered in your suppliers' expertise and services? Take the time to ask the right questions, and you could discover a wealth of profitable information.

Additional, untapped resources

Too many suppliers are reactive, versus proactive, in their working relationships with their customers because of downsized staffs, new personnel, poor training and support systems, or company culture. Whatever the cause, the net effect is that most suppliers don't know their customers' business directions and objectives or how they can contribute to their customers' strategies and goals beyond what we, as customers, ask of them on a day-to-day basis.

You can bridge that gap by asking, "What products and services do you have that we are not effectively utilizing in the operation of our company?"

Feedback can be startling. You might learn of new products and services you didn't know existed and information systems containing education and training resources. Some printers have found their suppliers offer volume and early payment discounts and even technical training with supporting materials.

Market research information

Many suppliers regularly develop or receive meaningful market information, including information about how certain customer markets are changing or how buying patterns are affected by cultural and technical changes in our society. This information can help your business development planning; plus, it can frequently be helpful to your customers' organizations as well.

Many suppliers have market research and information resources, including proprietary reports about expected changing user markets, new technologies being introduced into user markets, social trends, and even pending government regulations. But unless you ask, chances are your company will never see valuable information like this -- information that can result in new business development and retained customers.

Additional technical expertise

Most of us know, at some intuitive or experiential level, that our ability to effectively perform as individuals and organizations is dependent on what we know and how to apply what we know. What are possible implications to your business that your suppliers know how to operate every piece of equipment and most of the information systems in your plant?

How could you use that expertise when you hire new employees? Could your suppliers conduct a yearly or biannual audit of what you're doing and submit written recommendations on how your company's performance could be improved?

How else could suppliers help your business? Some companies ask them to conduct a yearly session during lunch that reviews recommended equipment maintenance procedures, opportunities for improved productivity, and reduced spoilage. Every printer knows that by reducing spoilage by 5 percent or makeready times by 15 to 20 percent can mean retaining a needed customer or improving bottom-line performance.

Stocking, warehousing, and shipping programs

Consider asking your suppliers, "Do you have stocking, warehousing, or shipping programs we're not utilizing as we should?" Your suppliers might have programs to help you reduce inventories and money spent on leasing space for inventories. In one situation, a printer and its supplier reached a consignment agreement in which the printer ultimately gained an additional 30 days of cash flow on a major material item. In another situation, it proved prudent to introduce the supplier to the printer's customer, who subsequently bought materials for the printer directly, totally removing the printer's required cash flow.

Sometimes, you'll find suppliers will even provide discounts. One international overnight shipper made, on request, a rare volume discount available to a printer's entire customer base. This ultimately created a competitive edge that was profound, affecting both short-term profits and, strategically, sales reps' effectiveness in successfully targeting national accounts on a "total cost" instead of a "print cost" supply basis.

Workflow technical expertise

Another question you might ask your suppliers involves electronic ordering capabilities: "Does your company have technical expertise available to assist our company's developing electronic ordering capabilities with our customers?"

Ironically, it appears most suppliers have never utilized these resources to become more important to their customers or to improve their customers' business performance. Yet, this type of programming investment for Internet workflow of customers' job-related information can have a profound impact on not only cost of order entry but, perhaps more importantly, ease of doing business between customer and supplier.

You and your suppliers can find opportunities to create electronic information and order entry workflow applications for your company that can reduce time and costs for ordering and reordering of standard products, allow customers to check on order status, perform invoicing, report on year-to-date budget and job costs incurred, and provide proofing capabilities.

Ask yourself, if order entry and workflow costs are either not tracked or are difficult to track, what would be the impact on your total operation if you could reduce both time and human resources committed to these activities by 20 to 50 percent? And if your suppliers can assist your "getting there" in a fraction of the time and out-of-pocket costs required, you're in effect under obligation to move -- because if you don't, your competitors will.

Major upcoming changes

Wouldn't it help your business to know your suppliers' plans for the future? You can find out just by asking, "What one major change should we expect from your company over the next six to 12 months?"

Other companies have gotten supplier responses that include: "price increases," "Internet tracking and rating," "business is up for sale by majority owner," "expect a major price increase during the third quarter of 2001," "handling the inventory on a TIMS program," "electronic ordering," and "new press technology to be introduced."

Summary

After asking suppliers these important questions, it's easy to see how the answers could improve your company's market differentiation, increase new business development, enhance ongoing perceived customer value, and improve bottom-line performance. By tapping suppliers' additional resources, sharing strategic information, and requiring them to be proactive in their contributions, your company can realize profound positive effects and possibly achieve the differentiation critical in today's soft economy.