In Order to Compete
A recent survey of businesses making changes in their supply chain revealed that “staying competitive” was the major driving force for the move. Unfortunately, this call to action is usually precipitated by a customer advising you that your pricing is too high compared to other quoted responses. While quality and performance are significant factors, allowing a competitor to gain a strategic advantage through different sourcing options is deemed unacceptable. Once this communication has been received, the implied segment of your response will be your decision to make the supplier change to the lower-cost provider and offer a significant portion of the savings as a pass-through to your customers.
This difficult supplier dilemma has been an ever-increasing and repeating theme among Bucks county clients over the past couple of years. Painfully, the reasons for making the change are often delivered after the opportunity to do something about it has already passed. The only customer-saving alternative is to make the change, quickly and without much notice to all the parties involved.
One of the advantages of ongoing, multi-level customer communications is being able to detect the building requirement for supplier changes before they become reality. Unfortunately, most small businesses are focused on the “right now” and aren’t able to be proactive. Our rapidly changing digital marketplace further complicates the situation for regional small businesses. The advantage of being local is significantly diminished by Internet transactions. In the past, customers invested time and money in bringing their local suppliers into compliance with their latest requirements. However, with the digital visibility of competitors outside of our region and the speed with which goods are able to be moved today make outside options more viable.
While very little of this scenario is new, it continues to play itself out again and again. Also, the best response to this problem in the past is still the best answer in 2015. There is no substitute for having effective relationships with fellow business leaders. Successfully managing the day-to-day requirements of your business is critical. However, it is equally important to cultivate and maintain on-going dialog and interactions with your peers. The ability to pick up the phone to ask for help or to communicate some market intelligence to a colleague is often the difference between handling a customer “fire drill” or a seamless transition.
Many local organizations provide networking opportunities. One of the newest opportunities is the Manufacturers Alliance of Bucks and Montgomery counties. This organization is run by manufacturers, for manufacturers and is dedicated to creating a networking vehicle for local business leaders. No fees are charged, and the only requirement for membership is your involvement. For additional information and to join forces with your fellow business leaders, you may contact Anthony Newberry, anewberry@buckscareerlink.org, (215) 874-2800 ext. 107.
Contact Gregory Olson, Director, SEWNSE Region, 215-458-7580, sewnse@steelvalley.org , to learn more www.steelvalley.org.