A Successful Supplier-to-Customer Relationship Defined

January 25, 2018

Successful customers desire positive supplier partnerships. The greatest suppliers provide proactive leadership in support of their customer’s profitable and sustainable growth. The supplier then must assure them of their future customer satisfaction. The PGC supply chain, for example, relies on great suppliers to in turn be a great supplier to our customers.

What does a positive supplier partnership look like? We at PGC see this partnership as being more dimensional than just delivering a part to a customer. It’s about creating new value in the form of both Product and Non-Product Improvement Innovation from the Customer Perspective. Customers can then measure value with the formula

However, customers don’t have the means to solve all their problems at one time. Great suppliers create value by providing solutions to the customer’s unsolved, underlying problems with quantifiable results. What are those underlying problems? They’re all about increasing functionality and reducing costs across all customer
activities that affect the customer’s income statement and balance sheet.

Rationale – why do we need this partnership?
Ask yourself and the other stakeholders in your company if they are experiencing any of the five common frustrations as outlined in the book Traction, by Geno Wickman:

  1. Lack of control over time, the market, your customers or your company?
  2. Frustrated with People? Customers, employees, vendors or partners?
  3. Not enough profit?
  4. Growth stalled?
  5. Staff numb to new initiatives? Need more traction?

The marketplace has changed

  1. Strained resources all around
  2. Customers are divesting their engineering (and other) expertise
  3. More complex solutions being demanded
  4. Increased competition for the more profitable opportunities
  5. Economic uncertainty (affects buying decisions, erodes confidence)

What does this mean for a company like PGC?

  1. Reactive growth is not sustainable
  2. Project orientation alone does not see the whole picture
  3. Opportunities abound, but tougher to win, riskier to lose

The Elements of a Great Partnership

  • Long term, deep and wide view of both sides of the business: for both Supplier’s and the Customer’s
  • Great business acumen: product, operations, distribution, finance, relationships, marketplace, competition
  • Superior insight and knowledge of the critical success factors
  • Great communications skills and execution
  • Attitude of confidence, collaboration
  • Industry knowledge and experience
  • Relationship orientated

What results can a great supplier/customer partnership expect?

  • Both will enjoy a strong brand and reputation in marketplace
  • Both are sought after as trusted partners
  • The supplier can more accurately forecast revenue to manage resources
  • Both reduce dependence on luck and proximity
  • Both reduce their operating costs

Conclusion: Recommendations for “4D Action Plan”:
Supplier partners must help key customers compete by uncovering and creating more value. The supplier partner is a key driver for creating customer business growth by innovating solutions and coordinating/facilitating their delivery. The supplier partner functions to understand its customer’s problems, sometimes better than the customer does, and provides the customer with alternatives.

About PGC: PGC works with brand leading, global OEMs and design engineers looking for innovative solutions for complex applications. Unlike transactional parts suppliers, PGC enjoys preferred partner status with customers who look to us to help them
differentiate their products using our proven 4D business process (Discover, Diagnose, Develop, Deliver).

Written By: Steve Hanson, Co-CEO, PGC Solutions