Dear Insider,
I have just read your article in IVT and it struck a chord with me.
Being a subcontract cab manufacturer, we pride ourselves on offering an excellent overall service to our customers and have built a strong infrastructure of personnel, design, testing and equipment capabilities, and feel we are one of the premium cab manufacturers in the UK and Europe. We deal with some of the largest construction, municipal and material handling manufacturers in the world.
However, this relationship can be a difficult one. Due to our subcontract position, we are often the last to know about the decisions that a customer makes regarding resourcing and product phase out, which has left us very little opportunity to go through a controlled phase out of stocks. We do run a very tight JIT system, however, there has been occasion when we have been left with large amounts of redundant stock/tooling and material that is effectively worthless.
With communication and a ‘grown up’ attitude to end of product life, most of these issues could have been avoided. There seems a real lack of trust, transparency and ability to say what you are going to do, and do what you say, in large OEMs. I truly believe this is down to an OEM middle management who are: (a) decision paralysed and won’t make a judgement in fear of internal reprisal; and (b) have little understanding of the products they produce. I have had many discussions with senior buyers who don’t know what they order from us; or don’t appreciate our processes and capabilities even though they have visited our facility many times. Even with marketing (you’ll see we have advertised in this month’s IVT), they don’t seem to take on board what else we can do for them and what else we can offer.
In many instances, our ‘smaller’ customers (volume/turnover) are much more open and honest, because they are closer to their product and know what they want from it and their suppliers. We get excited by dealing with these businesses; people you can build a true supplier partnership with; who you can develop a shared group of standards and values about quality, volumes and where both businesses want to grow towards.
In my experience, supplier partnership is a buzz word that OEMs tout around, yet what they actually mean is a traditional customer/supplier relationship where the supplier takes all the risk and is last to know what is happening. They have a fear that the supplier will move into the driving seat and drive up their prices or dictate terms, and therefore become very guarded and resistant to openness. In my experience, suppliers want to do the opposite and actively want to satisfy their customers because it makes commercial sense (and suppliers who do act like this, don’t last long!).
In reality, if OEMs could be more open and transparent, I feel they would get a far better response from their suppliers.
I am of course generalising as we have developed some very strong relationships with some of our OEMs (who are the largest global players in their certain disciplines), but this has been down to having a two-way respect for each other’s business and a frank and honest relationship.
