Monday, 13 June 2011

Reasons for dropping suppliers

We build trading floors and data centres at many international location. We also help design the physical security of those and similar places. Whilst we have a small company we have to deal with multiple suppliers. We usually undertake research before choosing a potential supplier except for the supply of trivial items. For larger purchases we negotiate hard, but try to also ensure a fair price for the supplier of any goods/services we purchase.

We also drop suppliers who do not perform in a business like fashion. Here's a list of the primary reasons for dropping a supplier:
  • An aggressive accounts/collection department; we try to pay bills on time, but when the Accounts Department tries to blame us for their own mistakes or poor procedures it will result in a rapid delisting of that supplier.
  • If there is any sign of corruption/bribery from the employees or direct agents of the supplier. We don't use Dell computers for that reason.
  • If their idea of customer relations is to treat us like a naive consumer with a basic entry on a poor customer relations management system. We don't expect to have to repeat information that we've provided before.
  • Vendors who lie or blame others when they screw up an order. We'd much rather suppliers just say: "We got this wrong, this is what we are going to do to fix the problem."
  • Vendors who fail to give us bad news in a timely fashion. If there is going to be a supply problem, the sooner we know the better we can handle it. If people work with us we will try to help them.
  • Vendors who try to arbitrage currency differences to make money. We've seen cases where the same product costs 75% more in the UK than in the USA.
  • Vendors who try to push high value time restricted purchases through a general Help Desk just because it is the way the Vendor's internal systems are organised.
Some vendors loose sight of the fact we act as a consultancy to our clients. We are small but exert high leverage on the negotiation process when we help our clients negotiate. It is not unusual for us to place an order for 500 PCs or multiple high end servers. We do not make profit on the deals we negotiate for our clients. We regard it as part of the consultancy process.  We are quite prepared to find alternative vendors for our clients if we become aware of bad business practices on the part of the vendor.

Conversely if we think a vendor has a great product and good business practices we have no problem providing an introduction to our client if we feel it will help them.

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