Workplace Doctor: What to do when a supplier is supplying problems

Communication and contract clarity are key. Try not to burn a bridge with them – but develop back-up options at the same time in case they let you down again.

A key supplier for my business is letting me down and it's affecting us badly. Stock is being withheld, emails are left unanswered and timescales for delivery are being missed. We are a small business, so while I realise I may not be a priority, the business is hurting. How do I negotiate a better relationship with my supplier? WB, Sharjah

We are all customers and we are all suppliers in some way in the GCC business supply chain. The first question that comes to mind for your query is why don’t you simply find a new supplier? If your current supplier is not meeting your business needs, then find one who does. Just as you face stiff competition in the UAE market, I am sure they also do. They may feel you are dependent on them and rely on their goods, and are therefore taking advantage of your good nature through their own poor service. Showing them you are willing to walk away could be the right attitude to take.

However, when I advise small businesses in this market, I tell them it is important to think things through before they burn that bridge and respond to the situation in a logical and considered manner. If this supplier is important to you or provides a unique service, then you must think of ways to maintain the relationship – but on your terms – and also develop a series of backups for if they were to ever let you down again. It is important to emphasise that their service is not acceptable and you expect improvements, but don’t be too hasty in severing all ties.

The first thing is to re-establish the trading terms with a clear and transparent contract in place. If you have a service-level agreement with your supplier, you can activate fines or reduced payments if jobs aren’t delivered as contracted. Similarly, the agreement should clearly lay down the rules of the engagement from response times to delivery timescales. Most reputable suppliers will see it as a show of commitment from your side and agree to this. If they refuse, then maybe it really is time to walk way.

You may feel angry or frustrated by the situation and want to vent to your supplier. Instead you need to find out why the supplier is creating an issue – perhaps there is a problem that can be sorted out. Has there been a breakdown in communication somewhere? What can be done to resolve it?

Don’t simply assume that the supplier is being purposefully difficult. There may be some problem that has arisen because of the way that you want items delivered or the way in which you do business. Similarly, it may be that their business itself is going through difficulty or they have trouble in their own ranks. So don’t apportion blame before you have clarified all the reasons why problems have occurred.

Sometimes this can shed new light on the issues and ensure that things are done differently in the future so that the difficulty is a short-term occurrence. Similarly, even if it doesn’t resolve the situation, it can give you good insight into what you are looking for and can expect from new future suppliers.

As well as doing the above, I would start planning damage limitation and create a system of backup suppliers you can turn to. Look for those providing similar goods, both inside and possibly outside the region. This may be an opportunity to broaden your horizons and seek different, possibly more innovative and market-leading goods or services. However, before making a big commitment with any new provider, trial them with a smaller order. New firms will also be happy, as it provides them with a shot at securing your regular business. So don’t feel bad about calling them at the last minute.

This is also why it pays to not burn your bridges with the current firm, as in the future (if they keep underperforming) they may become a last resort rather than your first, but a resort nonetheless. Most previous suppliers are grateful for another chance at your business, so don’t be afraid to call back on them in the 11th hour.

Doctor's prescription:

It can feel easy to sever ties from a bad supplier. However, sometimes it is important to understand the reasons behind their lack of service and then try to re-establish terms of business while simultaneously identifying some back-up options. Ultimately, you don’t want to be left high and dry without the goods you require.

Alex Davda is a business psychologist and client director at Ashridge Executive Education, Hult International Business School, and is based in the Middle East. Email him at [e-mail] for advice on any work issues.

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