What is a Good Supplier?

What do you need to look for in a good supplier? The flip side of this question, and a valuable exercise, is: “What does your customer look for in you?”

If we start with the premise that the purpose of a business is to maximize return on investment for its stockholders or owners, then what could we look for in a supplier that would support that mission? Or how can vendors support this purpose of corporate existence? A key ingredient of a successful vendor’s performance is the quality of the partnership established between you and your supplier.

One of the early decisions a business needs to make is exactly what business it is in. For Greco Apparel, we determined we were in the contract apparel manufacturing business. Then we ask what items we need to make ourselves and what do we buy from suppliers, the classic “make or buy decision.” When a business has defined its core competencies, it should purchase those goods or services it cannot efficiently supply itself. Now the role of supplier comes into perspective. As a vendor you want your client to believe you can service them better than anyone else.

We must purchase from suppliers those crucial components to support our company in fulfilling its mission. Assuming we want to give excellent service to our clients, only the best service from our vendors will enable us accomplish that. Asking what features define excellent service is akin to asking what is a quality product. The answer depends on the needs of the client. If you want to be a good supplier, be sure to get a clear picture of the requirements and specifications of the product or service you are being asked to deliver. Your client may not need more than requested and will certainly not expect less. So before one can judge the performance of a vendor, the client must clearly express its needs. Detailed, honest communications with your vendor as well as your own customers will be a key factor in determining the results of those relationships.

What if the vendor is new? Is there a track record with other clients you can call for references? Can you give trial orders? You must be confident that the vendor can deliver as expected because the quality of your product and service may be at the mercy of your vendor’s performance.. Conversely, when you navigate the path to becoming a good supplier to your customers, providing quality references or asking for that trial order may be the beginning of a solid relationship.

A supplier can enhance its value by offering new or better ideas or products to its customers. Improvements in product performance, design, reduction in costs, shorter lead times, and decreased minimum requirements can add value to the client and the supply chain. In some situations, the basis of growth may be challenge and support: When we are challenged to meet the demands of our clients, our vendors can offer their support in helping us meet our changing needs.

You want to deal with a vendor that is profitable. A company that has proven that it can run its business well will probably be around when you need it.. You don’t want to be searching frantically for new suppliers because just learned that your vendor went out of business. Greco Apparel has been in business since 1951. We still ship to a client today that we served back in the 1960’s!

The accuracy and speed of information made available to clients by suppliers will enhance value. For example, Greco Apparel currently emails weekly a production and delivery schedule showing status of all orders. We note any critical issues that may need attention. This helps maintain confidence that orders are progressing on schedule and delivery will be when expected. We are developing the capability through our website to host an active site for access to information updated daily from our factory floor. With their passwords, clients will be able to log onto the site and access information wherever they are located. Multiple users at the client site will also have access. This feature will enable our clients to be aware of vital delivery information to support service to their customers.

A good vendor will help reduce the client’s inventory costs by quick turn and just-in-time manufacturing. Dell Computers, for example, requires that major vendors establish warehouses contiguous to Dell’s assembly plant so Dell doesn’t carry raw material inventory. Turn time to build a custom ordered Dell computer is 4 hours! Similarly, Greco Apparel has reduced our turn time in manufacturing to one week in some cases, comparable in many respects to Dell’s 4-hour build time. This helps our clients significantly in terms of their customer service, response time, and cost control.

Exceeding Expectations Helps Cement Relationships

Don’t aim to simply satisfy the needs of your client; understand what it takes to make your client’s customer happy and exceed those expectations. For example, at Greco Apparel we make single uniforms and special sizes – which require custom patterns -- so our clients can provide uniforms to all their end users. We do it quickly so the employees can get into uniform and get to work!

Here’s an illustrative situation that occurred this year. To support a client with a rollout for an airline’s new uniforms we had a special challenge. Due to late design changes our client’s customer reduced the delivery window to just 6 days! We arranged for our factory to work through the weekend up through midnight for three nights … and we completed the order. The uniforms were on the flight on Monday as promised. Our performance enabled our customer to help procure a future multi-year, multi-million dollar contract! I know we would appreciate a vendor who would help in a similar manner. Who wouldn’t?

How do you know if your supplier is doing a good job? We don’t often define it as such, but we become cheerleaders for our vendors, but only for the excellent ones. By providing excellent service your company can move through the stages from ‘suspect’ to ‘cheerleader.’ Here are the incremental steps that lead to “success”:

Category:	What It Means:
Suspect	You know who the potential customer is but they don’t know you.
Prospect	The potential buyer is aware of you.
Purchaser	They buy for the first time.
Customer	Repeat purchases are made.
Cheerleader	The customer feels so good about your service; he or she is telling other buyers about you, voluntarily! This is where you want to reside.

When you think about what defines a good supplier, think about those benefits you strive to provide to your customers. Conversely, do your customers think of you as a good supplier? If not, step back and analyze what you look for in suppliers to your business … and then apply those characteristics to your business and become that excellent supplier!

Joseph Greco, president of Greco Apparel, has more than 30 years experience in the apparel business. He is currently completing his Masters of Science degree in Organizational Dynamics at the University of Pennsylvania.