What the Holidays Can Teach You About Supplier Relationships

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This time of year we focus on relationships. Often it’s thinking of how to get through the holidays without a disagreement with a certain family member or how to manage time with your family and your spouse’s without damaging relationships. In either case, if feathers are ruffled, you’re more likely to try to repair the relationship than to replace it.

It seems we’ve become a replacement society. It’s more likely the appliance repair person will replace a board rather than repair it. Last week, when a Windows 10 update failed and a laptop would not boot, the Microsoft support recommendation was to reset the PC back to its factory settings, wiping out all files, then reinstall (replace) Windows 10 and all programs and files. Since my wife is technical and actually seemed to know more than the Microsoft support person, she stepped in, formatted a USB drive, booted to bios, dusted off her old DOS capability to issue a string of commands, repaired the defective system files and the computer started normally with all files intact. It took time and effort, but the result of being able to repair the operating system rather than replace all files was well worth it. She will lecture on back-ups, but that’s another story…

The replace mindset carries over to buyer/supplier relationships, too. In many of the industries I work in, I am sad to see that there is less and less reliance on relationships, even though they are at the very core of business success and failure. Many buyers develop a “what have you done for me lately” attitude, believing that the grass is greener in the next pasture. Nothing can be further from the truth. The reality is that the existing supplier has tribal knowledge about your business, the cost to switch suppliers is relatively high, but this is rarely calculated in cost savings projections in the “switch suppliers” business case. The learning curve is long and the investment to onboard a new supplier is often not a consideration in sourcing decisions.

If results aren’t what is expected, should you repair or replace a supplier relationship? The answer depends on the response to these questions:

  1. What is the total cost of the change?
  2. How will you develop and manage a new supplier to increase value delivery?

In many cases there is no supplier relationship plan and the relationship drifts along until the company is ready to replace the relationship again. Repairing relationships and extracting maximum value takes hard work; if you put in the work and build the process, existing suppliers can increase value delivery. It’s an easy solution to replace, but a better value to repair relationships.

I wish everyone a happy holiday and safe new year. I am thankful for the relationships have in business and appreciate those clients and business relationships that made Aripart Consulting successful in its first year.

Take a little time to repair the next time you’re tempted to replace.

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