Are You Working With Quality Suppliers? Here are 5 Signs to Be Wary of
Suppliers are the backbone of your business. They are your resource for raw materials and essential components, which feed into your value stream and form the basis of production. Without your suppliers, all you’ve got is a system for production.
But as essential as they are, not every supplier is equally valuable. In fact, some suppliers may be weighing heavier on your business these days, unable to provide you with quality service, reliable deliveries, or fair pricing. Suddenly, they’re a drain on your value stream and a damper on your profits. But how do you know?
It’s not difficult to spot a decline in quality from your supplier. What is difficult is seeing that decline for what it is. You might be so used to doing business with this supplier that you give them a pass or look the other way … but before you know it, a few oddities become consistent realities. Here’s what to watch out for and how a decline in supplier quality can lead to a decline in your operations.
- Delays in shipments and material deliveries directly impact your ability to be a reliable producer. If your operations face disruption at the hands of your supplier, it’s time to start looking for an alternative supplier. Full stop. Good suppliers aren’t late in delivering product — that’s the core of their business! Once or twice in a blue moon is understandable; if it’s habitual, it’s a problem.
- Decline in responsiveness or attentiveness can mean your supplier has grown too big too fast, or that you’re not a priority for them anymore. Either way, it’s a decline in service quality that’ll hurt you. What if you need to communicate with them about an urgent matter or get to the bottom of a faulty batch of materials? You need a supplier you can communicate with.
- Reduced product availability can be a function of markets, but if it’s a consistent problem, you’re working with a supplier that has sourcing issues. You need materials and if you’re not getting them from your current supplier, it’s time to find one who can provide what you need, when you need it, in the quantity and quality you demand.
- Unreliable pricing, climbing rates, or credit issues all signal financial trouble on the supplier side. These are issues being passed to you, and you shouldn’t stand around and make them your problems. Look for suppliers who present relatively consistent pricing, a transparent rate structure, and stable credit terms.
- Loss of key personnel signals internal issues. There’s a difference between your account manager of 20 years retiring and several executives jumping ship within a short timeframe. The success of your supplier is passed on to you — it’s the same with their failures. Make sure you’re in business with suppliers that are thriving.
Switching suppliers or dropping a long-term supplier can be difficult. Make sure you do everything you can to communicate with them about the drop in quality and figure out a way to make sure you’re getting what you need. If they simply can’t deliver, make the difficult choice to diversify your supplier group or move on altogether. Remember, the quality of your suppliers has a direct impact on your business — negative or positive is up to you.
