What can I do if my small order quantity for packaging bags is not taken seriously by suppliers? (In-depth)

Higher purchase prices, weak negotiating power with suppliers, numerous materials, and tight delivery deadlines are the main problems encountered by procurement personnel in small batches packaging bags The main problems encountered in procurement. Due to the small quantity, procurement has less say with suppliers, prices are usually not advantageous, and procurement is relatively passive. Moreover, there are many materials and tight delivery deadlines, requiring faster logistics response speed.

Today, Shunxingyuan Packaging, a professional flexible packaging manufacturer, will share a real related case with you. This is a customer's communication with us during the packaging upgrade process. Let's see how you should deal with the same problem.

1. Problem Background

Packaging bag manufacturer A manufactures packaging bags for hardware product manufacturer F. In recent years, due to the decline in F's order volume, the quality of packaging bags produced by A for F has also deteriorated year by year. Incoming materials - prohibition - batch rejection - return inspection - replenishment or mutual judgment and then re-supply, seriously affecting procurement and production efficiency. In recent years, the reason for maintaining the cooperative relationship is that A hopes to use entering the supply chain of F, a Fortune Global 500 company, to improve its own position in the industry. For F, because the quantity is small and the profit is thin, it is unwilling to increase the price, and there is no alternative OEM factory.

2. Problem Solution

If you are the procurement of F company, facing this supplier that you are not used to and cannot replace, what should you do? Shunxingyuan Packaging has also had heated discussions internally on this issue, and the summary is as follows:

1. Compromise acceptance is risky, quality issues are not compromised

In the face of customer complaints, suppliers usually have a good attitude, but there are also cases of insincere compliance and double-dealing. Whenever problems occur, it is either that new employees are unfamiliar with the business, or that night shifts are changed, or supervisors are on leave.

As a procurement, we must understand one fact: since the supplier is willing to do it, there must be profit to be made, so quality issues must not be compromised. Do not lower the requirements just because the quantity has decreased. Product quality is unrelated to the quantity, and quality problems cannot be compromised, otherwise it will bring customer complaint risks to the company.

2. Attitude determines everything

Like F's supplier A, based on its own funds, equipment, and production capacity, it has the ability to produce high-quality products. As long as the top management attaches enough importance and the on-site managers have enough responsibility, quality improvement is definitely achievable. Therefore, if both parties are willing to continue cooperation, it is necessary to further discuss the improvement of the subsequent quality situation. In this case, since production is still continuing, it means that the other party is willing to cooperate. Why can't it be done well? Both parties need to have a serious discussion to find the root cause of the problem. If they are unwilling to cooperate, then they should quickly find alternative supply sources.

As the saying goes, life is like a play, it all depends on acting. As a procurement, you should occasionally instill in the supplier the company's future business expansion areas, talk about future cooperation opportunities between the two parties, and try to use other large-volume orders or orders with future profit points to maintain this supply relationship. Use emotion, reason, and profit to persuade them, striving to promote communication between the leaders of both parties. In the execution process, if the boss is serious, there is more hope to improve the business deadlock. It can be seen that this type of material should be considered bottleneck material for the enterprise. Although the value is not high, the number of suppliers is small, so a long-term cooperative relationship should be established with the supplier, the procurement batch should be increased, the supplier should be given enough attention, and under the permission of the company's procurement policy, a higher inventory should be maintained to maintain the normal operation of the enterprise production.

3. Fines are a temporary solution, not a permanent one

In daily business, some procurement personnel always act as the client, blaming suppliers and imposing fines, especially when quality problems occur, using this to compensate for the procurement's losses. However, in this case, if fines are imposed frequently and the fines are many times higher than the order amount, it may lead to the supplier terminating the cooperation. No one will do business at a loss. Once the supply relationship with the only supply source is not maintained well and the cooperation is terminated, the impact on the client will undoubtedly be fatal. In this case, the small order quantity is undoubtedly the main reason that restricts the supplier's cooperation degree. Combined orders, centralized procurement, price increases, and strengthening brand effects are all options to consider.

4. Finding alternative supply sources

The only supply source sometimes makes procurement feel powerless. Sometimes, procurement does need to evaluate the necessity of developing a dual supply source and adjust the business direction in time. Once competition is introduced, the supplier's cooperation degree will definitely improve accordingly. Of course, there is also a situation where after many efforts, it is indeed impossible to find an alternative supply source. At this time, it is necessary to conduct an internal review to see if the company's own products also need to be iterated.

5. Order issuance considerations

Small order quantities make it difficult for suppliers to achieve a balance between input and output. If market demand is stable in the short term, consider leaving a certain surplus when issuing orders, and negotiate the return rate with the supplier. After receiving the goods, prioritize meeting product quality requirements. Any defective products will be unconditionally returned. For example, if 1000 pieces should be ordered, 1110 pieces are ordered, leaving a margin for quality, and defective products are returned.

6. Delivery quality compensation ratio

Negotiate the delivery quality compensation ratio with the supplier. For example, if the standard allows a 98% acceptance rate, then negotiate a regular replenishment of 2% of good products.

After using the supplier "Perception Model" to interpret this case.

By interpreting the division of each quadrant in the above figure, it is not difficult to see that for S company, F company belongs to the third quadrant supplier. In tactical procurement enterprises, especially enterprises similar to S company, they need to think from the strategic level, because tactical thinking methods such as stopping supply, fines, on-site guidance, and leadership talks are more about solving problems for the sake of solving problems, and the temporary solution component is relatively large.

This issue should be considered from a strategic level. They don't want to strengthen this cooperation, but they accept orders. This falls into the third quadrant of the above diagram: the quadrant where the alternative for the second party is weak and the willingness to cooperate is weak. The reason is simple: they don't want to give up the opportunity to cooperate with Company S, but they also don't want to spend too much energy on such small orders. According to the supplier perception model, this is merely a maintenance-type customer. Therefore, their needs must be considered from a human perspective. If cooperation is necessary, then make strategic compromises; if alternatives are possible, then gradually and reasonably introduce a second supplier. Many companies, in supplier management, repeatedly emphasize "strong alliances," but rarely mention the other side of the coin: "birds of a feather flock together!" This is actually a strategic choice.

III. Reliable Supplier Recommendation

Dongguan Shunxingyuan Packaging Products Co., Ltd. has been specializing in the packaging industry for 19 years and has strong R&D, design, and production capabilities. Specialization leads to professionalism. Since its establishment, the company has adhered to the principle of "mutual cooperation, mutual benefit, and common development," constantly striving for excellence and leading the flexible packaging industry. It professionally produces various types of plastic bags for various industries, including clothing and apparel, food, chemicals, home gifts, and electronics. Furthermore, Dongguan Shunxingyuan Packaging Products Co., Ltd. invests a large amount of capital and manpower in product R&D every year, and has applied for numerous new patents. The company also attaches great importance to internal optimization of production processes, staff training, and improving core competitiveness. Dongguan Shunxingyuan Packaging Products Co., Ltd.'s customers are located in many countries around the world. ADIDAS, AAPE, IZZUE, I.T, Calvin Klein, Masco, Tarte, Chicken Label, and LEE are all well-known brands with which it has deep cooperation.

Shunxingyuan Packaging's Unique Advantages

Reasonable Pricing: Shunxingyuan Packaging can provide customers with the most comprehensive and reasonable quotes based on different materials and processes.

Exquisite Printing: Shunxingyuan Packaging adheres to a refined style. It employs numerous professional masters with over 20 years of experience in color matching and printing, and has professional quality inspectors to check the quality of the printing surface, ensuring that every detail of the packaging bag is exquisite.

High Efficiency: Shunxingyuan Packaging is adept at coordinating the supply chain and has a complete process from order entry to finished product delivery, truly achieving high efficiency from raw material supply to finished product delivery, saving customers a significant amount of time.

Excellent Service: Shunxingyuan Packaging is adept at capturing customer needs. Based on the principle of maximizing customer convenience, it strives to save costs in material selection and controls every production link to improve product satisfaction from 99% to 100%.

Since its establishment, Shunxingyuan Packaging has adhered to the principle of "quality is life, service is paramount." It strives for excellence to meet all customer requirements and strives to create a series of packaging products that best meet customer needs. Shunxingyuan Packaging products feature exquisite printing, good texture, and can be customized according to customer needs.

IV. Exquisite Packaging Bags Overview

Dongguan Shunxingyuan Packaging Products Co., Ltd., as the source factory, provides you with a complete set of packaging solutions. Welcome new and old customers to visit and discuss business (13549297179).

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