Business Insight 109 – ‘A Bird In The Hand…..’ (blog & vlog)

 

They agreed to our terms and we got the letter signed by the main board. It was such an enormous order that it would keep their factory going for a couple of months, and an excellent way for them to bed in an entire new factory and workforce.

Bill gave them the order, with a schedule of delivery over 3 months – this being the flow of products we would need to keep the fitters assigned to the job, busy and happy. 6 weeks later Eric Cheshire, our Lewes manager, phones up: “Where’s Bill? There are 5 huge lorries outside wanting to deliver the entire order for the new Tunbridge Wells contract, and I haven’t got the space”.

The new supplier had ignored Bill’s schedule and were playing games, but I asked Eric to somehow find the room; if we had all of the product, at least they couldn’t play silly buggers downstream – I just didn’t trust them. We ended up renting some space temporarily on the estate, and billed them for it. They said they thought we would be pleased to have everything in one hit. We never used them again and we made them wait even longer for their payment.

INSIGHT 109:- A guaranteed (but still acceptable) lower margin, with a known, loyal and guaranteed supplier, is infinitely preferable to risking getting a potentially higher margin (but still not guaranteed for other unforeseen or logistical issues) with an unknown and not trusted supplier. The bird in the hand……. 

 

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