Influence As a Small Buyer
Chris and Fred discuss the age-old problem of ‘influence’ or lack thereof when you are a small buyer. Influence to get reliable components. Influence to have that supplier remedy your issues. Because you feel too small and insignificant. Sound familiar? Then listen to this podcast.
Join Chris and Fred as they discuss engineers who feel that are trapped in a contract, a ‘market reality’ or anything else that makes us feel like we can’t do anything. Maybe you feel ‘low volume.’ Maybe you feel like the contract is so overbearing or dominant – you can’t do anything about it. But there is influence you can find if you look hard enough for it.
- We all know that size does matter. Fred talked about how during his time at Hewlett Packard, he never had any issue getting the suppliers to listen to what he wanted to say. Why? Because at one stage, Hewlett Packard was using one-third of the world’s capacitors (for example).
- Small sizes can mean more profit. Big companies like Hewlett Packard will drive suppliers down on prices … because they can. So there is only a small margin there for suppliers working with ‘big’ customers. So if you are a smaller organization, then you may mean a bigger profit margin for your suppliers. Use this!
- You represent information. Suppliers sometimes really struggle to get meaningful feedback from their customers. So if you are willing to volunteer that information, you become valuable to the supplier. Suppliers typically want to improve their products and market share. So let them know if you are using Design of Experiments (DoEs) to learn about the failure characteristics of their product. Becoming a partner means you become influential.
- Don’t forget the human side. Engineers are humans. Humans need purpose. So even if you feel locked into a relationship, try introducing the pilot, the patient, the doctor, the miner or the person who is going to use the product system or service that a third party is designing on your behalf to make that human connection. Understand that a contract is a cold, emotionless document. Not just for you. But for them as well. So if you provide them that sense of worth that the contract doesn’t, then again, you become influential.
- But we can’t have every person walking the production line or speaking to each engineer – we will have too many competing ideas! Rubbish. If your organization is genuinely concerned about having their own people interact with suppliers, then train them. Take the time to describe what the vision, value and goals are for your organization. Because if you have this concern in the first place, then your team is not aligned. Whose fault is that?
- Think about a professional sports team. Each athlete is a contractor. They have signed a contract to ‘do their best’ at that particular sport. But does the coach only interact with the player’s agent because they drafted the contract? NO! The same applies to any other ‘joint’ endeavor. Barriers hamper everything. And often we think that there are barriers when there aren’t. There are some cultural issues that get in the way as well. But understand … barriers inherently retard influence. So get rid of as many as you can.
- But this can be your fault too … if you make your contract do the ‘thinking’ instead of the supplier. Some contracts include a requirement to do a FMEA, on a Tuesday, with this many people, in this template, with this amount of (… insert thousands of other clauses here). This is a cultural problem where you are setting yourself up to remove your scope to influence in a positive way. So back off in the over-bearing requirements, and instead focus on keeping a good relationship with your suppliers.
- Just try!
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