Do you get the extra mile?

5 September 2007
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06 September 2007 | Antony Barton

Suppliers' willingness to meet buyers' unusual requests varies between industries, but is mainly influenced by buyers' purchasing power.

These are the findings of the latest SM poll of 100 purchasers, in which more than 40 per cent said "some" suppliers would make an extra effort to meet their ad hoc needs, free of charge. Only 2 per cent said all would, and 6 per cent, none.

One buyer in the rail industry said no suppliers would make an effort to meet his needs. He attributed this to suppliers having monopolies on particular products, and therefore a guarantee of his custom.

Increased competition on the supply side is central to vendors co-operating with buyers, according to most respondents.

Elizabeth Love, senior buyer at Mitsubishi Electric Air Conditioning Systems, said: "Most of our product parts are made to our specification and not always to industry standard. I find our suppliers more willing to work with us than against us."

Most respondents agreed large volume purchases lead to supplier flexibility. A substantial order for a bespoke item will, in many cases, absorb most of the supplier's development costs and the prospect of future orders encourages co-operation.

However, in some cases it comes down to a buyer's use of persuasion. One senior procurement manager said: Suppliers respect buyers who are firm with regards to vision and who demonstrate their clear strategic intent. Suppliers are then willing to go that extra mile."

This is especially true where suppliers see innovative ideas as money-making opportunities or new product lines. Cathy Houlihan, procurement specialist at The Law Society, adds the size of the supplier is central to uptake: "A large conglomerate tends to be less flexible than an SME. The larger the supplier, the more rigid the approach, which can stifle innovation."

Some respondents said that whether or not it is to their discernible advantage, suppliers would be wise to help buyers when they can.

SMsep2007

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