Big Picture - May 2016 - (Page 16)

business + management Managing Your Distribution Chain Establishing and maintaining positive relationships with your suppliers leads to a successful workflow. | by Marty McGhie BIG PICTURE May 2016 A s a business owner, one of your biggest headaches can be trying to manage things that you may not have complete control over, such as the various distribution networks of your business: raw goods suppliers, outsource suppliers, and shipping and logistics providers. Supply chain management can be a very complex business operations process. But perhaps the most critical part of your supply chain is your purchasing network of raw goods. Without materials, you have no production, therefore your materials suppliers will always be important to the success of your business. Establishing valuable relationships with your key suppliers is paramount to maintaining a successful workflow. When working with suppliers we often fall into the trap of focusing solely on price. While securing the best pricing from your vendors is obviously important to the financial success of your business, if pricing becomes your only priority, you may find yourself in a situation where you get what you pay for. Sacrificing service and quality for price will typically end up costing you in the long run. Let's assume you're a very shrewd, tough customer when negotiating price with your key suppliers. This approach may push you toward leveraging your competing suppliers against one another. You may even change vendors regularly, depending upon the pricing you are getting from them. Then, one day, you find yourself in a situation where you need your supplier to jump through some serious hoops to help you out on a project. Perhaps it may be securing inventory on a weekend for a rush job, or trying to locate specialty materials in large quantities, requiring your supplier to negotiate deliveries from various destinations. Whatever the problem, you need their help in a serious way. I can assure you that if you have spent months, or perhaps even years, beating them up over price, they probably won't be willing to come to your rescue. They may just simply tell you that they can't help you out. Again, sometimes we get what we pay for. To be clear, I'm not saying you can't secure great pricing from your suppliers by utilizing the marketplace. In fact, you can, and you should get the best pricing possible from all of your vendors. What I'm saying is that the best vendors will always need to be competitive in the marketplace with regards to pricing, but they may not, and most likely will not, always be the cheapest. Excellent service and high quality will always be worth more money. Not necessarily a lot more, but maybe a little extra to ensure top service and quality. OUTSOURCE SUPPLIERS The companies providing you with products or services that go directly to your customers with your name on the product are your outsource suppliers. Graphics hardware, software services, products you don't produce but are reselling to your customers, and installation services all fall under this category. These distributors are unique to your business in the MARTY MCGHIE is VP finance/operations of Ferrari Color, a digitalimaging center in Salt Lake City, San Francisco, and Sacramento. He is a partner and director of Signs.com. marty@ferraricolor.com 16 http://www.Signs.com

Table of Contents for the Digital Edition of Big Picture - May 2016

Big Picture - May 2016
Contents
Insight
Wide Angle
Upfront
Business + Management
Outside the Gamut
Can Print Shops Benefit from 3D Printing?
Beyond Water
R+D
Explorer

Big Picture - May 2016

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