Tying Vendor Bonds
Dave
Brugger knows that price isn’t everything. That’s
why this president of Horton Precast Concrete Inc.
in Gerard, Pa., builds long-term relationships not
only with customers, but also with vendors. “The
vendors we deal with aren’t always the low-price
leaders, but they give us the best service, communicate
with us and provide training,” says Brugger.
“They also inform us of changes in plans and
materials, which really helps us better manage our
own business.”
Timely deliveries are one area
where a precaster can’t afford to have delays,
which is yet another reason why Brugger prefers to
do business with vendors that he’s established
long-standing relationships with. “If we order
something from a supplier, we need to know when it
is going to arrive,” says Brugger. “We
can then be confident in our own quoted delivery times
to the customer. Often, the logistics of getting what
you want when you need it and knowing it’s going
to be a good product are more important than paying
the lowest price.”
Jumping around to different vendors
based on price can be problematic for precast manufactures,
says Jay B. Lipe, CEO at Minneapolis business consultancy
Emerge Marketing. As companies that rely on raw materials
to create their goods, he says precasters take risks
when they buy solely on price. “If you start
jumping around, you’ll probably see your costs
fluctuating due to back orders, reorders, bad orders,
bad shipments and any number of other things,”
says Lipe. “A great cost-containment strategy
is to rely on long-term vendor relationships and make
sure they flourish.”
“Suppliers form long-lasting
perceptions of their customers, so if a manufacturer
continually jumps around looking for the ‘price
du jour,’ suppliers won’t take them seriously,”
adds Mark Dancer, vice president and principal at
Pembroke Consulting, Philadelphia. “The better
choice is to build consultative, results-oriented
relationships suppliers.”
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