5 Questions Vendors Need to Answer

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The metal fabrication industry needs a booster shot. Sure, you may be getting the products you need from your vendors, but don’t be content with the relationship ending there. No one’s talking about company culture alignment in the vendor/customer relationship. Now’s the time to broach the subject.

Late last year we sent out an open call to purchasing agents, business owners, strategic planners and decision makers. The goal was to host a conversation around how to create a mutually beneficial relationship between manufacturer and vendor. A relationship that is built off transparency and trust. A partnership where both companies are investing in each other towards the common goal of growth. A partnership that doesn’t necessarily happen often.

After deliberation, a common thread was found. Spending the time up front in defining the partnership, setting expectations and qualifying each other would save each company the frustrations they experience with current relationships.

Asking the tough questions in the beginning will help qualify and begin to define the relationship.

Questions manufactures need to ask:

  • What is your current operation capacity?
  • Do you have systems in place to track current production?
  • What is the purchasing strategy for your business?
  • What is your annual capital improvement budget?
  • What’s the average employment length of your production workforce?

Questions vendors need to ask are:

  • What is the on-time delivery rate of your current vendor?
  • Longer lead times often mean keeping extra inventory. How much cash flow gets absorbed while you wait for your vendor?
  • Does your current vendor offer Just-In-Time inventory to help keep your cash flow strong?
  • Do you incur inspection costs from vendor quality challenges?
  • Does your current vendor manage a current ISO Registration Certificate to increase efficiencies?

What questions do you ask to define a relationship? What questions do you want to ask but don’t?

Questions like these open the door to bigger questions that allow a purchasing agent to see clearly into a vendor’s business, not leave things to chance. For vendors these questions create clarity in the relationship and the expectations are set. With questions like these answered each party can make a decision to move forward or move on.

Stop measuring success by how much pain you can tolerate in business relationships. Let’s all agree to push for transparency within this industry. Again, we are all trying to grow our businesses. Let’s define what that means for ourselves and find companies where those growth goals align.

We are sending out another open call to all purchasing agents, business owners, strategic planners and decision makers for another conversation on building successful partnerships.