Keys to Choosing A Good Supplier – Facilities

To a novice just entering the world of purchasing, the path to complete this process and be successful seems simple — who offers the lowest price? After years spent in the facilities purchasing business, it became painfully clear that the process was indeed more complicated. Let’s start with the concept of price. There is a world of difference between price and the actual cost of an item. When choosing a cleaning chemical, merely comparing the cost per gallon of one product to another is inadequate. Most cleaning chemicals need to be diluted and the dilution ratios can differ. Moreover, the cleaning efficiency can vary resulting in the need to use more product to finish the task at hand. While both products may be priced at $1.00 per gallon, if you can use less of product A than of product B, then the costs are not the same. The only way to be certain of this is from trial and error.

My approach to purchasing is a little different. I have been fortunate, over the years, to have many suppliers call on me to convince me to buy their products. My philosophy has been simple when scheduling these calls — everyone, the first time, gets their 15-minute spiel. Simply put, you don’t know, what you don’t know. By refusing to see someone, you may be passing on the next great innovation in the world of cleaning. If in 15 minutes, I do not see any value, then the interview is terminated. If there is a perceived value, then samples are requested and tests are performed to confirm the assumption.

Even if there is a value in the product and the cost is reasonable, there are other factors that need to be considered. The first is the reputation of the supplier. The vendor must have the ability to supply product within a reasonable amount of time and within the quantities requested. In the purchasing world, this is known as the fill rate. If I order 100 gallons of floor finish and the vendor ships 95, what do you think their fill rate might be? 95%? My approach is more draconian, the fill rate is zero. I ordered 100 gallons of a product to complete a job and I did not get that amount, I cannot complete the project. This results in a disgruntled customer. The supplier must supply a consistent product with consistent quality. They must provide what they say they are supplying. I have been known to weigh cases of can liners to see if the vendor is shipping what I have ordered. There is a mathematical relationship with the dimensions of an individual bag and its thickness of this bag to its total weight. I will not bore you with the formula, but it is well known in the industry. I recall conducting this process with a supplier who I concluded was short weighing our cases, either by reducing the count or the gauge of the bags. I debited the vendor for over $4,000 and, once I received the credit, I called them in and terminated our business relationship. This experience taught me to always remain prudent even with your most trusted business partners.

If a vendor is new to the industry, then you must rely on references. If a supplier is reluctant to give you these, then it is a reason not to proceed. If they are given to you, you must follow thru. I have learned that people who have had good results with products or vendors are more than happy to share their experiences. If you are ever contacted about a supplier or product, you should give an honest review. This networking, in the long run, will reduce the likelihood of making poor decisions.