Navigating Suppliers

It's All About the Money

Ulf Wolf / September 2019

How do you choose and establish a relationship with the supplier who will stack the success-odds in your favor?

One can safely say that this is a relationship where experience speaks louder than just about anything else, which is why we went to the membership of the Association of the Wall and Ceiling Industry for input and advice.

Supplier Values
When it comes to suppliers, what do we value the most?

“Communication and honesty,” says Gavin Semrow, president of Advantech, Inc. in Pennsylvania, “and being available to talk with us about products, needs and deliverables, etc., when needed. Also, setting real expectations—knowing and stating truly when something will be available or delivered.”

“For me,” says Kevin Hughey, vice president of Denver operations at The Gallegos Corporation in Colorado, “the main thing would be ‘stock what we need, do what you say, and deliver when you say.’ We make our promises based on supplier promises and if they don’t come through, it makes us look bad as well.”
    
Says Gilly Turgeon, president of Green Mountain Drywall Co., Inc. in Vermont, “I value honesty, first and foremost. Next year, we will have been in business for 50 years, and in the past 20 we have had two suppliers. The reason we turned to a second supplier is that the first one had a dishonest salesman.”
    
Ken Fox, vice president at Delta United Specialties, Inc. in Tennessee, says, “I value reliability, which includes both honesty and delivery as promised.”
    
“Customer service,” says Michael Mazzone, president of Statewide General Contracting & Construction, Inc. in Hawaii. “I want a sales rep who answers the phone or calls back right away.”
    
“What sways my decision the most,” says Robert Coyle, operations manager and vice president at Dayton Walls & Ceilings, Inc. in Ohio, “is honesty, pricing, quote timeliness, reliability and availability of outside sales reps.
    
“Yes, the pricing has to be such that we can compete but being able to reach and trust our sales rep is paramount to me. If you’re informed, you can plan around poor delivery time and inventory issues, but we cannot plan based on a lie.”
    
“Inventory, delivery time, price, honesty and reliability are all important,” suggests Anthony Brooks, president of Platinum Drywall, Inc. in Arkansas. “But both inventory and delivery may suffer if you rely too much on a single supplier.”
    
Adds John Kirk, owner of Kirk Builders in California’s Bay Area, “I value the ability to handle special orders.”
    
Shares Mike Heering, president of F.L. Crane & Sons, Inc. in Mississippi, “I truly value that our suppliers seem always to honor the price they quote us even if their cost has risen, but when their costs fall, they usually give us a lower-than-quoted price.”
    
Says Brenda Reicks, vice president of construction at JARCO Builders, Ltd. in Iowa, “Material availability and good pricing is what our company values the most.”
    
Offers Dan Schnippert, procurement director at Marek in Texas, “The quality we value most is the supplier’s ability to execute. A supplier’s performance on a job is crucial to, and an extension of, our performance.”
    
“As an estimator,” says Dave DeHorn, chief estimator at Brady Company Los Angeles, Inc. in California, “I value pricing, honesty and reliability. Also, a supplier should have a consistent pricing structure, be honest in communicating to you and be available when you have a question about a product they represent.”
    
Lee Zaretzky, president of Ronsco, Inc. in New York City, concurs, adding that consistency is also something he values in a supplier.
    
Says Greg Smith, area operations manager of Mirage Builders, Inc. in Nevada, “What I value most is reliability and great customer service. After all, we are mostly a commodity-based industry. They all sell the same metal studs and drywall, so it’s the customer service that distinguishes them. This customer service boils down to delivering our materials on-site, on time so that we can perform for our customers.
    
“Also, I have always approached my suppliers with a teammate mentality. Without them, we could not perform at our best.”

Ideal Supplier
What, then, do contractors look for in an ideal supplier?
    
Says Semrow, “Someone who can deliver the materials we need on time and who really wants to build a long-term relationship.”
    
Hughey looks for “knowledge about the industry and specifically the products they sell. When I have questions, I need quick and accurate answers to be able to work through any situation.”
    
“I look for great inventory,” says Turgeon. “On-time deliveries and, as always, good pricing.”
    
Mazzone stresses customer service.
    
Quips Kenneth Ottinger, senior field technician at Kitchell Quality Assurance in Arizona, “In my experience, the greatest service a supplier can render is not to be an additional liability.”
    
Coyle looks for “Someone who will make it happen, without excuses, no matter what the problem. All other aspects can be worked around.”
    
Brooks looks for “good pricing and product availability. Also, product knowledge and the ability to source uncommon products—and to know about these.”
    
Says Heering, “We look for suppliers who put our needs first.”
    
Reicks looks for “suppliers who respond quickly to quote requests.”
    
As for Schnippert, “An ideal supplier is one who shares our values: Our commitment to safety, exemplary service and a drive to succeed. A supplier who demonstrates these attributes is one we want to partner with.”
    
Gabriel Castillo, director of business development at Pillar Construction, Inc. in Virginia, sees two types of suppliers: specialty products and commodities.
    
“For specialty suppliers—custom-made or fabricated systems (ceilings, wall panels, fancy finishes) where design, engineering and shop drawings are involved, I look for collaboration,” Castillo says. “For commodity suppliers, I look for service and technical support.”
    
DeHorn looks for “quick turnarounds on material quotes. You only have so much time to respond to a bid, so you don’t have days to spend waiting for material quotes.”
    
Zaretzky looks for a supplier who “goes the extra mile and truly values us, and who will do anything within reason for us, just like we do for our customers.”
    
Smith says, “It’s funny to say this, but my ideal supplier is one who picks up the phone. You would think this should go without saying, but the ones who do are the ones who will be there when you really need support. The better our suppliers respond to us, the better we can respond to our clients. It’s a direct cause/effect relationship that when done right will help steer us to the next project with our clients.”

Supplier Relationship
What then, constitutes a great contractor/supplier relationship?
    
For Semrow: “When the supplier is part of my team. We care about them making money and being successful, and they care about our business. They want to build a long-term relationship.”
    
Suggests Hughey, “They need a good understanding of what I need and expect from them. They need to be part of my team.”
    
Turgeon says, “We both need to make money. That’s the bottom line. Our supplier is 60 miles away. We have a mutual understanding that we try to have them send us as full a truck as possible on every trip, even if it means delaying a delivery for a day or two. If they don’t make money, we won’t have them around very long.”
    
Coyle concurs. “We both understand that we are in business to make a profit,” he says. “They help us, and we help them.”
    
For Fox it’s a relationship where “the supplier sells us at a fair price and does whatever it takes to meet our needs.”
    
Says Mazzone, “Since construction is an ever-changing environment, I need a supplier who can work with us and work through any and all changes.”
    
Brooks’ take is that “it’s an honest two-way relationship, open and direct. It’s knowing each other’s needs and expectations.”
    
Says Heering, “A great contractor/supplier relationship begins when you both respect each other and are both open to a little give and take.”
    
By Reicks’ light: “In a great relationship, we can count on the supplier to jump through hoops to give us the best material pricing when we need it, and then to give us accurate lead times for special materials at the time of bid and to deliver material to the job site when promised. Of course, the supplier, in turn, can count on us to pay all invoices on time.”
    
Says Schnippert, “Like any great relationship, communication is key. When you work with people who are genuinely committed to your shared success, communication keeps everyone aligned.”
    
“A great contractor/supplier relationship,” concurs DeHorn, “is one that flows both ways. As a contractor you must be specific in what you want, give the supplier as much advance warning as possible, and treat them fairly.
    
“As a supplier you must communicate effectively with both the estimating and operations side of the business, be proactive to changes in the contractor’s schedule as far as stocking and delivery goes, as well as educate the contractor on new products you now carry that may save the contractor time and or money.”
    
“A two-way no-problem attitude,” confirms Zaretzky.
    
Says Smith, “Suppliers who operate like your partners are those you love to have along with you as do you design/build work. They come up with ideas and materials to help you land projects and then service those projects as you work through the construction phase. Over time, they become trusted friends who don’t want to see your company fail and will work very hard with you to ensure the success of the project.”

Choosing a Supplier
How, then, to choose a supplier?
    
Suggests Semrow, “After trying several suppliers, choose those who meet your needs and want to work side-by-side with you.”
    
Says Hughey, “I choose the supplier who has the products that best fit the specs for a given project. Each company has strengths and weaknesses, from stucco to EIFS, stone to masonry.”
    
Stresses Coyle, “I choose honesty above all, while pricing has to be competitive. If you lie to me, I don’t ever forget. I may forgive once, but I will never forget. We have to let our clients know when material will be on-site. They hear excuses every day from many corners; I don’t want to add my woes to theirs.”
    
“Pricing is the first thing I look at,” says Brooks. “Then I look at the location of the project, the size of the project and which supplier is supplying which projects currently. Do I think this supplier can take on another one of our projects given their current workload?”
    
Says DeHorn, “We choose the supplier who can meet the pricing structure, deliver the product to the jobsite in a timely fashion, and can be proactive in servicing our needs.”
    
Adds Smith, “We team up with the suppliers who best serve us, complement our business plan and share our vision of customer service.”

Other Thoughts
Muses Hughey, “Give us your best products at your best price, and that will open the door. Follow up with good service and delivery, and you will build a partnership.”
    
Observes Ottinger, “Too often, suppliers/product sales reps present themselves as technical experts for a product and offer advice to subs and builders that, while often very practical and as often functionally successful, deviate from published guidelines and restrictions, exposing the contractor to additional risk from warranty failures and potential construction-defect suits for deviations without design or manufacturer support. If a product supplier is going to allow, and often encourage, a salesperson to act as a technical support person, there must be a formal program in place so that the builder is better protected if products need to be installed in ways that are not specifically covered by the manufacturer’s original specifications.”
    
Says Brooks, “We can’t function as a contractor without our suppliers. They can be our best friends or our worst enemies. They can make or break a project with their failures or with their willingness to go above and beyond simply supplying.”
    
Advises Kirk, “Try to be a great customer. Have respect for your supplier. Pay your bills on time.”
    
Adds Reicks, “We look for suppliers who have been in business a long time.”
    
As for DeHorn, “Suppliers need to manage their cash flow just like we do. So, we feel it is important to pay our suppliers in a timely fashion and by doing so, we are given better pricing and service that lead to a win-win situation.”

The Supplier’s View
Naturally, this contractor/supplier picture would not be complete without the supplier’s perspective. What do suppliers look for in the ideal contractor-customer?
    
Says John Filion at Wallboard Supply Co., Inc., a Maine supplier, “It is one who has an organized ordering cycle for projects and who gives us at least a day’s notice for orders and who provides adequate on-site space for our deliveries. And, of course, who always honors payment terms.”
    
Shares Todd Scoville, president of Gypsum by McCartney in New York, “I look for an established, reasonable contractor-customer with a common-sense approach, someone I know I can extend credit to without too much concern—a handshake-type relationship. These contractors are normally low maintenance (but high volume), and you can rely on them to work with you in all facets of the relationship.”
    
Todd Mills, president of Frontier Drywall Supply of Denver, Inc. in Colorado, says he looks for “organizational skills that maximize each individual delivery, minimizing the number of delivery runs. I’d also look for sufficient contractor cash flow to pay us on time, whether or not they are paid by the GC.”
    
Says George Adams, president of Adams Supply of Dallas, Inc., a Texas Supplier, “I expect some knowledge of the products that we sell. I’d also look to how he runs his business and how he pays his bills.”
    
Adds Michael Snead, managing partner at L&W Supply in North Carolina, “I look for honest and straightforward communication with all levels of our organization. Also, a sincere desire to treat suppliers with the same respect and courtesy that they expect from us.”
    
Says Kirby Thompson, senior vice president of sales and marketing at Foundation Building Materials in Florida, “We look for a professional contractor who operates with high integrity. We look for innovators and industry leaders since they tend to be in it for the long haul.
    
“The more organized the contractor, the better customer service we can provide. Constant fire drills are not an easy way to make a living. Our desire is to have open and honest communication that leads to trust and loyalty in a relationship. Of course, credit worthiness is a must for our industry to remain healthy and viable.”
    
Observes Peter Wilhelms, vice president of marketing at Negwer Materials in Missouri, “We have found that contractors who understand all costs involved (some are penny-wise and pound foolish) seem to be those who most value our products and services.”

Great Supplier/Contractor Relationship
Offers Kevin Kennington, president of Swanson Building Materials, Inc., a Utah supplier, “A good contractor/suppler relationship is one where each knows that you both need to make money. We have some customers—very few, thank goodness—who could not care less if we are in business tomorrow as long as they are getting what they want, from pricing to delivery, and no matter how unreasonable that may be. The best relationship is give-and-take from both sides so that we all can make money.”
    
Says Jeanne McGrath, president of Holmes Drywall Supply in Kansas, “Based upon my experience, the first and foremost requirement for a good relationship with a contractor is that they pay promptly.
    
“Also, in-the-field communication is of utmost importance. If the field purchaser knows what he needs and can give us good notice and complete orders, we can be a better supplier. Too many times, however, the field guys who order the material do not really know what they need and as a result do not place their orders in a timely manner. This creates confusion and a hurry-up attitude for both parties.
    
“Again, in the field, if the contractor has a good working relationship with us, his crew will be ready for our deliveries and have the space cleared out and open for us. Keeping other trades and equipment out of our way when we deliver makes us more efficient and eliminates any confrontations on the job site—thus a smooth delivery.”
    
Suggests Filion, “Mutual understanding is crucial. Knowing that some things can go wrong but also how to fix them without handing someone the short end of the stick.”
    
Observes Scoville, “In a good relationship, you reach a high level of trust and familiarity. Each hold the other in high regard and you both bend over backwards to keep the other happy. The long-term reward is loyalty and respect.”
    
Says Mills, “A true partnership is where the contractor cares as much about your success as you do theirs. No subservience from either partner. Both parties engage in fair treatment not so much for altruistic reasons but as an avenue to maximizing profits.”
    
Adams puts it succinctly: “You become friends. You help each other.”
    
Says Snead, “It’s a win-win relationship where both parties benefit from working together to achieve a common goal, both effectively and efficiently managing the process of ordering and supplying needed materials to the contractor’s job site so that both contractor and supplier are able to achieve profitable results.”
    
For Thompson, a great supplier-contractor relationship is “a mutually beneficial one. The contractor and supplier value equally the relationship and the profitability of the other. In the end the best relationships create true business friendships.”
    
Concludes Wilhelms, “In a great relationship, the contractor wants you to contribute to their job pre-planning process. Also, a knowledgeable contractor understands all those things that add to our delivery costs: jobsite not being ready for the delivery (cleaned out areas), bits-and-pieces delivery, etc.
    
“Most importantly in this relationship, though, is a contractor who knows we are an active contributing partner in their business—a co-creator, not just the ‘supplier.’”

California-based Ulf Wolf is the senior writer at Words & Images.