SMEs: How to Perform as a Supplier and Customer?

Your SME organization has a few A-Category customers who account for most of your business. You treat these customers with much consideration. Your aim is to build Customer Loyalty. In actionable terms, you obey the requests made by your A-Category customers. This translates to repeat business.

But, are you an A-Category supplier to your A-Category customer(s)? Probably not. Your customer has a couple of more suppliers for the same product / service. The one who gets the lion’s share is the one who is Better / Faster / Cheaper. In this case, your customer is in all probability a larger organization than your own.

Try mapping the Marketing & Quality challenges for a SME supplying to Maruti-Suzuki, or L&T Heavy Engineering Division, or Mahindra Tractors, or Tata Motors.

Marketing must understand that the customer believes you are simply a supplier.

As a Customer

As a mirror, is your SME’s Purchasing Department conducting itself as a world-class customer?                          

Can your SME set a strategic goal to become an A-Category customer of your critical suppliers?

What does that mean? It means strategically purchasing a big share of the supplier’s capacity. It means joint-costing for win-win decisions. It means that the Purchasing Department serves as a Quality Consultant to the supplier.

RANDOM THOUGHTS

1. We all learned the micro economics tool Break-Even Point. Why do we not use it to identify Quality Improvement Projects?
2. We all learned the micro economics tool Make Or Buy. Why do we not extend the understanding to Process Capability?