From The Horse’s Mouth

I was flying with a senior engineer from one of the top 5 aerospace companies in the world this week as he was on a trip to meet with a number of his suppliers around the country. He’s been an engineer on the supply chain management side for years in several different very large companies. I asked him his thoughts on smaller suppliers- how can they get into a big company, how can they grow their business and what are some of the common mistakes. A couple things I got from our conversation include:

Getting In
The traditional answers came up, but some nuggets came out. Industry networking – figure out a way to connect to the senior people at trade shows. Read the papers and articles in the industry and contact those authors who are active engineers in the companies with whom you would like to do business. LinkedIn is an emerging way to reach out to senior people and he is seeing more social media connection going on, especially in the specialty groups that are formed inside of LinkedIn and other SM platforms.

Procurement
He saw my eyes roll and he laughed, but he tried to reassure me that this is still a good way to get in. His point was that starting at the top and working on getting an executive sponsor in Procurement/Purchasing/SCM is still the right move. Most small companies look at these areas as processes to follow or areas to avoid. However, his point is that the executives in these areas get big points for bringing in good suppliers who solve problems. If there is a mix of smaller suppliers who make the grade, they get every bit as much credit as working with a big supplier. In addition, smaller suppliers are easier to move into the “Top Supplier of the Year” winner’s circle at the end of the year because they are easier to develop, which is another way those executives keep score. His point was that the executives in this area of the business are getting their heat from the company for failing suppliers of any size. If they can get a quick resolution to a real problem by bringing in a smaller but successful supplier, it is a big win.

Main Suppliers
Being a second to a prime supplier is a successful route and often leads to the second becoming a prime over time. His emphasis was the “over time.” The route is second, co-developed parts, prime, and this cycle moves slowly.

Here’s what he said about growing your business:
Small companies are often looking for the fast win and fast growth, so they push too early. By being painstakingly perfect on initial orders, the follow-on orders and projects will come more quickly. Go slow to move fast.

Also, he said that smaller companies who ask for help, collaborate and are transparent rocket to the top of the list. The ones who hide their issues, close down or try to solve everything themselves do not look like good partners- they look suspicious.

Visibility Is Big
Bring more people to the meetings when the big company comes to your site. Use the visits not only as quality control and education sessions but do in-services, brainstorming, and problem-solving sessions. When you visit the big company, take more people. Take senior people, take the president, when the big company is in the offices regardless of the level of person who comes, the executives of the smaller company need to show up and spend time.

Also, who is directly working the account is a HUGE issue. Don’t use younger, inexperienced people in any way on the account. Senior people need to handle the account management, the regular touch point work, any engineering, production or logistics areas.  If the bigger company makes a comment about a person they like or dislike, take it very seriously. Those relationships are very impacting to the overall companies’ relationships in many ways behind the scenes.

I think for many of us who work in the small business to big business arena, these thoughts echo our own impressions and experience of how this works: a good reminder and all of that.

However, I found the conversation interesting because of some general tones that were worth noting:

  1. Smaller is better: The general sense was that his experience was that he preferred smaller vendors because of responsiveness, leverage and quality. His big issues were resources and that he felt that as those companies grew they sometimes “forgot who brought them to the dance.”
  2. Playing favorites: Once a smaller company became a “go to guy for me,” he would maneuver the system to favor that company very aggressively. However, that company had to be able to respond with the same energy, quality and success on the next project or they became pigeonholed and would not get many new opportunities.
  3. Whining v. collaborating: His point was that he and his people would work tirelessly with a company that they liked, who demonstrated that they were working just as hard and who collaborated. They cut off the whiners – those companies who had no ideas, who waited for his group to make all of the revisions and who seemed to sit on the other end of the rope waiting to be pulled up instead of at least grabbing onto the rope and to start climbing.

For most everyone reading this I think you will feel as I did about this conversation, invigorated. It clarifies from behind the curtain what the market thinks about your efforts and how it will respond to your approach.