Tuesday, January 17, 2012

Good Supplier Relationships Are Key

Back in November, you may recall, I wrote "If Your Phone Ain't Ringing, That's Me Not Calling." It was the long, sad tale of woe about the painful process by which I came to have a new iPhone 4s. This is another part of that story, previously unwritten. It highlights the importance of good supplier relations.

The decision to try the newly announced iPhone 4S was not very difficult. Although an avid Google fan and lover of all things Android, experiencing other technologies is important for me stay current and to maintain an objective view. I prefer to base my opinions and evaluations on real world experience when possible. I hesitate to recommend anything I haven't personally used.

All the reasons I wanted to try the new iPhone are in the story so I won't repeat them here. It also covers the details about the ridiculous process which forced me to return the trial unit to the carrier in order to receive my upgrade to an identical new unit. What was not discussed is some of the activities that took place behind the scenes for weeks to follow.

Several years back the company outsourced the management of cell phones. It is a total "cradle to grave" process for all company employees. If you need a new phone, want to add a service, change plans, cancel or replace the phone you call one number. Aggregating our accounts and putting the optimization of our plans under one roof saved millions of dollars while improving the company's ability to manage its inventory of equipment and the associated rate plans.

This third party administrator (TPA) was responsible for enabling me to upgrade to the iPhone. They informed me of my eligibility and facilitated the trial unit when I requested it. When the logistics nightmare occurred they did everything in their power to smooth it over and, in fact, I got the new phone just a day or so after returning the old one despite being told by the carrier they were out of stock and back ordered for weeks.

The mistakes didn't end there. They were sorting out billing errors with the carrier for two months following the change over. The TPA was my advocate and got every last incorrect charge removed from the bills. I never called or had to speak with the carrier.

In my view it is imperative that you develop a deep, trusted relationship with your major suppliers. If you treat them fairly they will do the same for you. On many occasions I found it necessary to ask for special consideration and never once was I refused. The flip side is when employees were being unreasonable or flat out wrong I would side with the vendor and make sure they were whole -- even if it it came out of my budget.

Like many things in life, balance is important. You can negotiate and bargain your suppliers down. But if they cannot make a decent profit they are going to either find ways to make it up, cutting corners or adding extra charges,  or they may be forced to go out of business. Better to strike a fair deal and build a solid working relationship with a vendor. It should work out that you both make money in the end or why else would you be working together the first place?

Captain Joe

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