Dealing with Difficult Suppliers

If you are a procurement professional or indirectly dealing with third party entity, it is always your own expectation that your request for certain condition to be met is a forgone conclusion. Suppliers are expected to fulfill all your requirement, provided you are demanding these within the scope of the supplies requirement.

You may request the suppliers to change their packaging method to meet your own internal needs. Other examples from a procurement person is for changing of delivery schedule, requesting answers for non conform material supplies or even to a very simple demand for the suppliers to place additional label to the package so that your warehouse team can identify the package easily during receiving.

However, once in a while, some suppliers will play "hardball" with you and refuse to compliance to your needs.

How can you handle such issues in a manner which will not harm future relation or ensure they bend down to your wishes?

The key to tackling difficult suppliers is to have a effective strategy right from the sourcing stage. This mean, even before the supplier has been conceived into your organization, the cast has been set. This is where, the rules of the games are made known to all potential suppliers, so that they are aware of the need to toes the specific condition if they desire to be in business.

Suppliers can sometimes be difficult to handle if;

a)  A company are putting too much egg into one basket (almost sole supplier)
b) You have only one supplier that you work closely with
c)  You hardly made any demand for improvement from them
d)  Price increase are easily accepted without much negotiation
e) Your buying power is weak and you over reliance on suppliers to act as a "bank" to your operation
f)  Information on parts supplies are not clear and later, you demanded on supplier to improve

To avoid the above, the sourcing and procurement strategy must be aligned in order that no a single supplier in your book are becoming too powerful to the extent that, you needed them more then they needed you when comparing on the surface.

When creating a professional supplier - customer relationship, the biggest mistake an organization can made is by relying solely on the supply chain or procurement team leader or manager to hold the stick. This can be initially effective but in the long run, familiarity breed contempt as the relationship becoming too comfortable for the suppliers.

It is always a good strategy to ensure, even though the procurement team hold the key to most decision, communication and demands are made through other channel.

Example, the quality department may issue a demand for improvement directly to the supplier and procurement team members stay out from such demand, at least in the eye of the supplier.

The end game, however how big or small a supplier is, the needs to be in business to be relevant is more important and the pressure from multiple front will work wonder for any organization.

Having conclude it, however, like any strategy, alignment and synchronization of the strategy is very important too, as without any planning and synchronization, a difficult supplier can bounced back and you may have to face the full impact of it as well.