As the year progresses and we see further price increases coming down the track is there any value in doing a tender process? Simply, the answer is no.
Don’t waste your valuable time in this timely process as by the time you get to the end you will need to start again. Currently It is a constant roundabout that keeps spinning if you jump on this now.
Back in May during a supplier engagement with a client, we had 52 products that we had to be discussed. At the end of this meeting which took 1hr 25 mins, as we shook hands and thanked each other for the other’s time the phone of the supplier beeped. He asked us to sit again for a few minutes. WE RECEIVED 3 PRICE INCREASES. We didn’t leave the table; we didn’t part company but that was the madness of it all back then.
While this madness no longer exists, this is still a daily battle/chore. This needs to be given time, this needs to be a priority. This needs to be factored into the schedule. Who looks after this task in your company? Are they spending too little time at this? Are they spending too much time at this?
As we see the introduction of numerous online ordering platforms are we cutting that relationship we once had with our supplier/rep? Are supplier’s becoming faceless? During a meeting recently a very informed and enthusiastic rep was selling the benefits of buying online. She was doing a good job of it and was gaining traction until the business owner asked 1 simple question. Are you putting yourself out of a job? Quizzically, the enthusiastic rep asked the business owner what he meant. Again, a simple answer. If I buy all my products online and have less and less engagement with you why would your employer keep paying you a salary? Pay for a car? Pay you holiday pay? Pay for training? Is this a fair assessment?
People buy from people
This business owner doesn’t want to buy form a computer he wants to buy from a person. A company that has a face. Someone he can ring to ask a question. Someone he can ring to resolve an issue. Someone he can sit with, discuss his businesses needs and find common ground.
In these difficult supply days, it has never been more important to have engagement with your suppliers. It doesn’t need to be over cooked but regular meets and informed discussions need to be had. Have your purchasing file with you at these meetings (if you don’t have 1 have the latest invoices to hand). Have a particular list of products to discuss, look for alternatives, have your unit/kg/ltr price worked out (pack sizes differ) and does the alternative offer a solution to your particular goal? Keep/improve quality and bring down your unit/kg/ltr cost? How long can you protect this price for me? Is availability constant on this product?
Simple but critical questions to be asked in the current climate, A very simple quote I use in engagements which I use at the beginning of a meeting is ‘can you price these so you don’t lose on that element going forward’. Work together to achieve a long-term fix rather a short-term solution. Every company needs margin to work and yours is no different.
Be open to change if you can’t achieve your required targets but do engage and give your current supplier the opportunity to come back with an offer. They will value this, and this will strengthen your relationship.
Have positive engagements, work with your supplier rather than change on the 1st cheaper price you receive.
Don’t waste valuable time on project’s that wouldn’t hold any value. Simply do your research and have positive engagement. Do business the right way, it has to work for both, but make sure you needs are met.
To get up to date price trends email us here at Treo Food & Beverage Insights and we will tailor a solution to your need. firstname.lastname@example.org.