One thing we learn about life, is we all have a choice.
This dives deep into personal and business decisions. My one question for today, is why do we choose to buy off that supplier or individual for that type of product or service?
There is many reasons and I will cover a few below as it pertains to a allocating your product orders or management services to a contractor (supplier, manufacturer, agent, and/or consultant) for the manufacturing of apparel, footwear and accessories to ensure your brand’s integrity, identity, and image.
I have noticed over the years that many people grow content, are too busy, don’t have the time, the knowledge, the expertise, experience or the budget and end up settling for what’s in front of them or choosing the wrong supplier for relationship or political reasons.
But really that company or individual does not have the:
– experience (have they made this product, do they know what they are doing?)
– expertise or education (history and facts)
– proper infrastructure or support to manage the order or business (organization, systems, policies, and procedures)
– planning, budgeting, management or understanding of the TCO (financial structure)
– people (workforce to manufacture the products)
– ability to qualify and select suppliers, factories or vendors (every step must be calculated)
– ability to speak the country and local language (technical terms are not easy to explain)
– ability to understand the culture and business process (why, what, when, who, and where)
– passion and intelligence to look after your products and brand integrity, image, and identity? (responsibilities and culture)
Now how do you and your staff manage your business? Are you/they enjoying the industry momentum and growth? Is there no reason to worry about the quality of your products, people or suppliers? Do you/they vette and validate frequently to ensure there is integrity, transparency and honesty. What are your steps in place for order planning, allocation and replenishment, what do you/they do to ensure long-term success with your business. Below are some of the facts to make a checklist to ensure your order is made with limited problems and headaches.
– is the order placed on emotion or reason?
– is there sufficient knowledge about all the facts?
– is the supply chain transparent?
– what is the trusted individuals expertise and experience?
– has the supplier/factory been vetted?
– do they specialize? or they a jack of all trades/products?
– does the person allocating the order really understand the order or are they guessing and hoping for the best?
– what is the real TCO?
I have noticed that many suppliers believe they have that buyer wrapped around their finger and that buyer can do nothing without them. They build a relationship with that buyer (company) to ensure that they will never leave. Even if they are delivering substandard products or causing more problems and headaches that cost the business in long-term relationships and customer/brand building.
How many holes in the pocket are okay for every 1000 units on an order?
Is the hole always obvious? How do you know where a hole starts?
When you can fit three fingers through the pocket, you know there is a major problem.
I would like to look at some buyer scenarios below:
1) There is a buyer (owner, director, manager) from an established brand who purchases from a supplier because they:
– have equity in the manufacturing operation
– have established credit terms
– have a long term relationship with that supplier
– like the product
– like the brand/company’s philosophy
– have a friend in the business who will give them a good price and look after their order. This becomes the what is real (perception vs deception) and transparent
– have established trust standards, price, quality and delivery
– have great coordination of the production (always on time deliveries)
– understand the real TCO
– have transparency throughout the entire production and business process
2) The first error is trust over transparency, it would be better to see the full picture than someone’s opinion which is based on perceived trust.
To protect everyone involved in this post, I have hidden the brand names logos and identities.
This is a story of a buyer who choose to buy their products from a friend (wholesaler), who in turn relied on an established and reputable agent to place the order with an unqualified contractor to purchase and manufacture their products on behalf of their client.
For starters there were five points of communication that needed to travel through to get from the buyer to the actual contractor.
- Lost in translation (what are the technical terms/languages? how to translate?), project (item) scope and requirements
- Time (how much time do you really have?)
- Cost (what is the actual TCO?)
- Expertise (who is really speaking?)
- Experience (do they make this product everyday?)
The wholesaler boasted how this buyer can do nothing without them. Their hands off approach to managing their business baffled me. But then again they are operating a prosperous and successful business.
Taking advantage of established relationships to deliver inferior products to an uneducated, lazy or busy customer.
In addition the actual client has an emerging business in a growing industry. So everyone has momentum on their side.
So really is properly allocating your production or the quality of your products and the integrity of your brand really an issue?
Does the person allocating the orders really need to visit any of the suppliers. I have a relationship with this supplier, there price and delivery is okay. What could go wrong?
What if the buyer/wholesaler/agent/manufacturer doesn’t have the infrastructure or understanding of their business of the past 25 years. They make decisions and allocate without any thought, planning or logic as they have their emotion.
For these products there was no planning, budgeting, TCO or love put into this order. On top of it the I was lucky enough to be at this factory to check on production and validate the supplier to avoid a really big disaster.
Immediately I told the client that this supplier was inadequate to make this production!!!
Then I had to have conversations with the agent to understand why and how they allocated this production to this contract manufacturer.
Then as the buyer said I needed to make this work, I needed to figure out how to manage this agent and contractor to achieve the results required by my quality standards.
This becomes a story of managing what is put on your plate. Because of others people’s poor decisions that were made without facts that could prevent these problems. It is reactive over proactive planning!!! No way to run or manage a business successfully.
Not understanding or acknowledging your TCO. What is the true cost of doing business with this/that supplier.
Now what if your supplier or the individual responsible for managing your products has many of the above issues. How can you avoid, train or manage to ensure all parties involved have success?