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Partnerships are strategic

| Uncategorized | January 5, 2012

These are the times when we see how partners really are and if in fact a partner or not. Will those customers still be there in these tough market conditions? Are they really partners or opportunists? We have had the advantage of being the “middle man” for many customers and suppliers and it really needs to be a partnership, especially in plastics and recycling.

There are those customers that are there when they are saving .20 – .40 / lb. on in a hot market, but as soon as the market turns, gone. They simply stop buying and come up with great excuses. Is this a partnership? I have always believed in partnerships being two way streets and not a matter of convenience. What if the supplier / small recycler were to stop selling to you in a hot market or hike their prices?

From the supplier’s side, I have seen several large recyclers get burnt in the past few years, which has been a result of several key points that could be addressed. First, the suppliers need to keep a better read on the market and not procrastinate communicating to the scrap suppliers. Secondly, buy pricing of scrap needs to be adjusted immediately per the market, even when the other “Scrappy” characters are there offer higher amounts to take your feed stream. Take care your business and communicate, if they are true partners they will stick with you or come back to you in a few months when they get burnt.

From the customer side (i.e. Manufacturer) trying to squeeze every penny out of your suppliers only goes so far before you lose that supplier. If you truly are partners you will work with your suppliers in all markets, not just when it is convenient for you and in your favor. Understand the market over time and look at the situation strategically, not just tactically. It is easy to penny pinch and try to save every penny in a down market, but look at the supply chain over a longer period of time and understand your supplier’s business and what they are dealing with if you want to keep them

Communicate, partners need to talk, understand, and work together in all markets; If you lose the supply stream altogether, who wins? Ensure you have a good program in place that is good for everyone in every market.

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