In an increasingly competitive world, suppliers have to search for more savings to deliver products to demanding customers. Retail markets have seen products drop in price dramatically and have now reacted by offering improved features in shortening cycles ? in essence, you spend less initially but buy more in the long term.
This reality has also spread to business to business practices and is affecting almost every type of product in every industry, including the bulk materials handling and conveyor industry.
As a result of this competition, customers now have access to a greater variety of brands and products. New opportunities and emerging markets create demand for product lines that render the previous generation of products obsolete.
This leads to shorter life cycles, cheaper products, commoditisation and market cannibalisation. In the short term, customers benefit with improved bargaining power, wider options and more suppliers to choose from. However, the advantages could very well turn into risks.
RISKS BEHIND THE TREND
Product imitation and commoditisation lead to lower standards, higher cost of sales and dilution of service quality.
White-labeling and imitation of quality products by inferior processes and materials are prime examples of quality erosion. In economies where standards are less stringent and labour is cheaper, opportunistic companies churn out options that look as good (or even better) but do not have the depth and engineering to back up the products in application.
With cheaper options, discounts can be made by overzealous suppliers that bank on quick and heavy discounting to close the deal, leaving customers to fend for themselves when things go wrong.
?In our specialist industry, the least you should do is to engage with experienced people who run proven businesses, offering world class products that professionals in the industry can back and testify to,? advised Neil Kinder, the managing director of Kinder & Co, a leading supplier to the bulk materials handling and conveyor industry.
?Our customers have come to rely on us because they know we spend a lot of time and resources to deliver products from reliable and proven world leaders. That?s why we are confident about putting our Kinder & Co brand on the products we sell.?
QUESTIONS FOR YOUR SUPPLIER
Neil Kinder?s advice is that when you are looking for a supplier for your company?s needs, you should ask five questions:
1. Is the company established, experienced and trusted in the industry?
2. Do the company?s directors and management have enough experience to understand what?s really important in the industry?
3. Do the products and services the company offer come with guarantees and documented proof of their reliability and technical capability?
4. Does the company have a track record of achievements and continuous improvement, educating, supporting and leading the industry?
5. Does the company have the technical expertise and experience to support you in implementing their products in your system and work with your people to successfully transform your efficiency and productivity?
By applying these sensible questions to every one of your suppliers and service providers, you can have greater confidence and peace of mind that you are selecting the right supplier to help grow your business and deliver on promises to your staff, shareholders and customers.
Source: Kinder & Co