Working with suppliers is an ongoing relationship that needs time, investment and consideration. Since you’ve clicked this article, you might start having concerns within your supply chain. When working with a supplier, it is a partnership so you a lot of planning should go into setting up the contract & expectations. If any steps are skipped or there is a misalignment with your suppliers, you may experience some trouble along the way and in some cases, have to replace a vendor. Before doing anything, read the following steps to take.
When working with suppliers, it is important to look inwards before bringing your concerns to the table. You may want to ask yourself the following questions:
Did you do your part?
- Was direction given cohesive and direct?
- Was the communication consistent and productive?
- Did you pay invoices correctly and on time?
- Did you change direction multiple times?
- Did you change material types after they invested in the raws?
- Were there long delays between sampling and PO placement?
- Did you push up timelines or delay them unexpectedly?
One of the most important parts of being an effective partner is to review how you can be more consistent and effective in your approach.
If you have taken some reflection time and want to continue to experience issues, you may want to understand and isolate where the concerns are. These may include:
- Consistency of quality has decreased and defects have increased.
- Vendors are becoming less and less communicative. Emails and direct messages have gone unanswered for an extended period of time.
- Prices have changed unexpectedly from initial agreements or have steadily increased within a short amount of time. (Double check to verify that it isn’t due to raw materials or change in costs.)
- Products have consistently been delayed and have missed scheduled sail dates multiple times. (Double check to verify that this isn’t from raw materials or non-obvious logistic challenges.)
- Is your point of contact frequently changing or management leaving?
- During your audits or production inspections, is your vendor trying to steer away your inspector from certain areas or refusing certain to perform certain stress tests?
You should schedule times to discuss concerns and points of improvements in pre-arranged meetings. You should receive from your vendor a root cause analysis and corrective action plan if you flag a specific concern with proof of wrongdoings or lapses. If you have evidence of increased defects or missed milestones, make sure to have these in organized documentation. You may also want to bring photos or videos of quality concerns and have quantitative data to back up your point. A vendor should also be given a chance to rectify these issues.
If the vendor continues to fall short of expectations after root cause and corrective action talks, you may want to replace the vendor. You should first review your contracts, master service agreements, statement of works and similar agreements to ensure you’re within your rights. You should also have a lawyer review the contracts. Walking away from a supplier is always a last resort and you should try to peel back the onion before coming to a quick conclusion on the state of your product or relationship. If you’re no longer able to make it work, please be advised you might run into potential legal, reputation or quality repercussions that you may experience if you do walk.The key to making sure these events don’t happen is that your supply chain is refined and focused to begin with. By setting up correct processes, clear expectations and utilizing a local partner – you can increase your chances of success and mitigate risk in your supply chain. Contact Victure Group for more information!
Join the following groups for your sourcing needs-
China Sourcing- https://www.linkedin.com/groups/4462099/
India Sourcing- https://www.linkedin.com/groups/8454669/
Vietnam Sourcing- https://www.linkedin.com/groups/8815822/
Asia Sourcing- https://www.linkedin.com/groups/8909383/
Gifts and Premiums- https://www.linkedin.com/groups/4421652/
Circular Economy- https://www.linkedin.com/groups/13908783/