Copyright © 2001 FleetWatch magazine and FleetWatch On-Line.

No part of this publication may be reproduced without the prior written permission from the publishers. Views published are not necessarily those of the publishers.

After 23 years, Elite still buys Isuzus from Westvaal, a GM-Isuzu dealer in Klerksdorp. 'We do anything and everything to support such loyalty," says Westvaal retailer principal Hennie Botha.

Regular readers will have noticed in the past few issues that we have been warning against making purchase decisions based on price alone. It may be cheap up-front but it could be expensive in the long-run. Given this background, FleetWatch correspondent Dave Scott, using an actual example of a relationship spanning some 23 years, highlights an aspect of business operations that should be given more attention, namely, Supplier Relationship Management. Take heed for it could just add a new dimension of enjoyment to your business while enabling you to provide even better service to your customers.

There's nothing more contradictory than a business proclaiming 'the customer is king' but at the back end, suppliers are treated like price-driven dirt. Road transport is a huge consumer of service, parts, materials and capital goods, so one key process that needs consummate management is SRM - Supplier Relationship Management - and it's not all about tenders and 'the price'.

CRM - Customer Relationship Management - has become such a buzz-word that suppliers' roles are overlooked. This is ironic given that it all starts with a supplier where the chain that supports effective CRM is quickly broken if the supplier fails to deliver. Some companies are spending millions on CRM software while their purchasing processes are simply archaic and, never mind just plain bad attitude, SRM encompasses merely a price on the invoice.

Professor Andy Andrews said it for customers: "Concentrate on relationships and not transactions." But this applies equally well to supplier relationships because suppliers are being asked to deliver their very best so as to enable their customers to have the most positive impact on the end users.

It is this very issue that comes out in a discussion with Les Tomsett, MD of the Elite Group, a low-profile operation that now has over 1 000 vehicles on the road. Elite Truck Hire and associated companies have grown with the market, ranking among the biggest of SA truck fleets today.

When asked about Elite's success in transport, Tomsett points to "everyone in the scrum. It's not just Elite that makes it happen for our customers but our suppliers do so as well. It's all about supplier loyalty to Elite that eventually works its way down to our customers."
 

Les Tomsett... "Being caring to customers and nasty to suppliers doesn't work for us.'

It's a cultural thing
According to Tomsett, it's a cultural 'thing' at Elite to afford strategic suppliers the same degree of loyalty as an Elite customer. "You can't live two lives. Being caring to customers and nasty to suppliers doesn't work for us. This does not exclude discipline in the relationship and Elite continuously scours the market for product and service efficiencies. We certainly listen to sources outside of our suppliers and are prepared to change, even if it's a reluctant change."

One relationship that has come a long way is that with GM and Isuzu. Says Tomsett: "They are there when we need them and understand our business and requirements and are prepared to adapt Isuzu specifications to suit Elite's requirements, such as trailer applications and wheelbase changes. Close on 60% of the 800 strong contracts and rental fleet are Isuzu bakkies and trucks that have proved their durability in stop-start city operations. I must add that in the past two years, the GM Isuzu truck operation has changed its profile - trucks are no longer a side-issue with them and they are now orientated towards developing heavy commercial vehicle relationships. Sticking with this supplier has proved to be good for us."

Added values not seen in price
Supplier relationships developed over time often include many added-values that a price will mask. What is it that makes a supplier voluntarily drop his braaivleis tongs and run to open the store for a client on a Sunday? The problem is that suppliers do not list these added-values or bring them to user attention at a top management level. Everything just seems to happen at 'that price level' such as;

• Product and service training.

• Driver training.

• Free information support.

• Product customising and adaptation.

• Product failure analysis and field investigations.

• Stocking rebuilt exchange service units.

• Parts delivery services.

• Consignment stocks of fast-moving replacement parts.

• Free transport analysis consultancy services.

• 24-hour service response and management after-hour contact details.

• Supplier software systems specially developed for specific client use.

• Structured warranty support that goes beyond written guarantee clauses.

• Free technical and service advice.

Show me the money - but be passionate
A supplier who is passionate about his product and your business will make things happen for your customer. And it's not just about a 'Supplier of the Year Award'. SRM is about an on-going process that adds value, contains cost, improves quality and enhances user perceptions. In other words, SRM can introduce the 'Wow!' into CRM because it's where CRM is rooted. Successful purchasing in road transport is both a purposefully designed process and a cultural factor.

The last word goes to Hennie Botha, retailer principal of Westvaal, a GM- Isuzu dealer in Klerksdorp. "I started as a salesman at Westvaal in 1982, the same time that Elite bought their first Isuzu trucks from us. Now, 23 years later, they still support us for all their national requirements. I have never, ever experienced such a loyal customer. We do anything and everything to support such loyalty - it's a very special relationship."

When it comes to SRM, relationships work far better than mere discounts and transactions.