16 Aug Now is the Time to Entertain New Suppliers
It may seem counterintuitive to source new vendors during a less-than-stellar market, but it’s actually the optimal time to bridge new relationships. The greatest gains can be found in:
- Testing Availability
- Thorough Review
OEMs are constantly looking for product efficiency. When there is a downturn in the economy, engineers have more time to test parts and find solutions to warranty issues. Dedicated resources for testing products and researching new applications can open the door to part consolidations and assemblies, or more-efficient parts.
New relationships give OEMs the opportunity to negotiate contracts at lower price points. If the vendor’s product meets or exceeds performance metrics, manufacturers have the power to improve margins by either securing a part at lower costs or renegotiating with current suppliers.
“When agricultural OEMs contact us during a downturn, we find that their proactive measures pay off on the buy-side,” said Nik Poulakidas, sales associate for CCTY Bearing Company.
Manufacturers can fully realize their greatest cost savings by working with vendors who can supply the part plus assembly. Finding partners who supply finished assemblies will lead to improved cost structures and lower engagement needs.
Suppliers already servicing your account may be able to provide additional parts, but need the opportunity to present. Encourage engineers to identify parts that can benefit from manufacturing assembly and then allow current partners to bid on the part. This is also an opportunity for new vendors to submit quotes based on a batch of products.
Finding alternate sourcing partners is just the first step. During a slowdown, purchasing departments have adequate time to fully vet the potential supplier for financial stability, quality assurance and delivery guarantees. Finding a company who freely shares scorecards and references, plus having the ability to visit their factory, will provide the greatest peace of mind.
During on-site visits ask questions about company’s emerging technologies and how they are being applied within the industry. Conversations about products in development does two things:
- Shows that the company is forward thinking and understands how the marketplace is evolving.
- Demonstrates that they have the engineering knowledge to develop innovative products, and that it can work with you on customized solutions in the future.
Nimble agriculture manufactures know that market leaders are made by accurately responding to both up and down cycles. Taking advantage of the opportunities within both environments gives OEMs a platform to either benefit on the buy- or sell-side.
Since we are currently in the buy-side – take full advantage of it by meeting with new vendors. After all, if you are not evaluating new suppliers, your competition may be one step ahead of you.