Supplier Roadmaps (Sometimes lead to the door)

As the downturn continues all of us in the supply chain are going to be dealing with some pretty tough decisions and for buyers, that may mean some tough conversations with suppliers.

This week working though a big cancellation with one supplier I was actually kicked off their property. This supplier had my order for exactly one week and the product was due in July. Now most of us would jump on the leadtime of a component, but I asked the question and found out that they had not even ordered the material for it yet. The real problem was that they wanted me to pay a 100% cancellation fee. We argued for over an hour about overhead, operating expenses all the way to taking food off of his table. 

While I always strive to be tough but reasonable, there is a limit to how far I am willing to go. Finally I said “Bottom line I will not pay for something you have only entered into your system.” At this point I was asked to leave. I have since had discussions with this supplier and come to an agreement to quote them on new business and if they are competitive we will award it to them.

My point of this story is, that we don’t always know what people are looking for or what is driving certain behaviors. This supplier really needed the revenue to keep things going, but what it did was force me to determine if this supplier should be on my long term roadmap. 

As good purchasing folks we should be constantly evaluating our supply chain and now is a really good time to re-visiting our long term roadmaps especially looking at long term viability. With this supplier negotiation I was forced to admit that I need this supplier for some IP, but that I need to get some more work to them to ensure their longevity. 

In the end I have asked my team to stretch the goal from 20% supplier reduction to 30% and moved it up a couple of notches in priority. 

Got your own supplier stories in the current economy? Post a comment below and share yours.