Doing the Impossible!

Everybody said it was impossible, until someone came along who didn't know that and just did it.

In my opinion this state of mind will bring you halfway to your success. Let me affirm this statement by the following incident that happened.           

A client of mine decided to consolidate the spend of 10 MRO suppliers to one total supplier for all maintenance and production supplies. One supplier (Company X) however was not willing to deliver it’s products to this total supplier. Background information is that Company X has the exclusive sales rights for the products that he imports and therefore acts as sole distributer in the Benelux, Germany, Scandinavia and UK. After having met the owner of Company X, I learned that my client was an interesting customer for them (revenue wise) and that they claimed to be an added value for my client concerning advice in Visual Management, Lean-tools and 5S. I asked the buyer of my client which opportunities he saw and he stated that he was doing many years business with Company X and he and 2 other buyers before him were not able to get any discount or whatsoever. It was impossible negotiating with Company X, so he did not believe that this situation could or would change.

I contacted the SHE officer to find out whether we were dependent on the knowledge and advice of Company X. According the SHE officer this was absolutely not the case, but the product Company X was delivering was the best and he was not willing to accept another brand. The products of Company X were not standard items for the total supplier so they used a mark-up of 15%.

The proposition I would like to make was that the total supplier reduced their mark-up with 5%, Company X to give a minimal discount of 5% and that the remaining percentage was for my customer. So we all would bear the pain.

I contacted the total supplier and asked them to support me in the approach towards Company X and they lowered their mark-up with 5% and adopted the existing payment terms of 30 days (instead of their 60 days). Company X was informed that we only require the products to be delivered via the total supplier. Knowledge or advice was not needed, the payment terms of 30 days would be applicable and we expect that the excellent delivery performance would continue also when delivering via the total supplier . My request to Company x was to propose a discount (should be minimal 5%) so his (and mine) highly valued customer would not bear the pain alone. A proposition you could not refuse, in my point of view, as it was reasonable and equitable. After some phone calls back and forth Company X granted 8% discount. This resulted in a cost avoidance of 13% but in overall it improved the Total Cost due to handling one supplier less.

But the most important achievement was that the buyer saw with his own eyes that the impossible can be done!