Todays Webinar Presented By: Hosted By: Ed Edwards Doesnt anyone - - PowerPoint PPT Presentation

Presented By: Ed Edwards Hosted By:

Today’s Webinar

Doesn’t anyone out there want my business?

CHALLENGES IN ENGAGING SMBs AS SUPPLY CHAIN PARTNERS

Ed Edwards – Manager, Audience Outreach, THOMASNET.com

2015 TOP 10

SMB Business Issues

Source = techaisle

Are addressed by getting new customers

Fortune 100 Supplier Initial RFX Event Using THOMASNET.com

26

Supplier Responses

219

# of Suppliers in Event

• The Importance of SMBs
• SMB Perceptions and Realities
• Tactical Recommendations for Buyers
• How THOMASNET.com can help
• Q&A

OVERVIEW

The Importance of SMBs

• f US manufacturers

are between 5-99 employees

Source = 2013 US Census Data

49%

39% 17% 14% 18% 6% 6%

0-4 Employees 5-9 Employees 10-19 Employees 20-99 Employees 100-499 Employees 500+ Employees

Manufacturing

• f US business

services companies are between 5-99 employees

Source = 2013 US Census Data

99%

Business Services

74% 13% 7% 5%

0-4 Employees 5-9 Employees 10-19 Employees 20-99 Employees 100-499 Employees 500+ Employees

* Source = THOMASNET User Research 2013

What (if any) are your company's preferences for sourcing from the following geographies?*

Local Regional National

Always Preferred

41.0% 17.0% 20.8%

Generally Preferred

31.1% 57.1% 32.1%

Sometimes Preferred

18.9% 15.6% 29.7%

Rarely/Never Preferred

1.9% 1.4% 6.1%

No Pref to Note

7.1% 9.0% 11.3%

YOU WANT TO SOURCE REGIONALLY

Top (5) Reasons

%

Cost Reduction

87%

Quality or Consistency Issues

75%

New Product or Customer

63%

Logistics (Extended Lead-Times, Inventory Issues, etc.)

55%

Single Supplier Risk Management

38%

Employee Size Average Payroll per employee 0-4 employees $40,004 5-9 employees $36,313 10-19 employees $40,717 20-99 employees $45,769 100-499 employees $48,975 500+ employees $61,150

YOU WANT TO KEEP COSTS DOWN

What led you or your company to seek a new or alternative supplier? (Select all that apply)* Average Payroll By Company Size (US Manufacturers)**

* Source = THOMASNET User Research 2013 ** Source = 2013 US Census Data

More People = More Cost + Less Innovation YOU WANT AGILITY More Bureaucracy = More Bureaucracy

SMB Perceptions and Realities

Natalie Menke

President

Universal Blower Pac & INOHVA Pneumatics

THE VOICE OF THE SMB

UNDERSTAND WHO YOU’RE WORKING WITH

PERCEPTION: BUREAUCRATIC PROCESS

“(Larger companies)…will send you 100s

• f pages of specifications, but you have

to figure it out for yourself. It is like they are saying we should be lucky to have the chance to work with them…”

PERCEPTION: LONG ODDS

“To bid one of these requires us to pass on five other smaller

• pportunities…so these take 5 times

the amount of work and the odds of winning are less than 10%…”

PERCEPTION:

RISK BEING TIED TO ONE CUSTOMER

“We have two golden rules – we never have any one customer represent more than 20% of our business, and we never change the way we do business for any

• ne customer…”

SMBs BIG COMPANY

PERCEPTION:

LONG PAYMENT TERMS

REALITY:

LONG PAYMENT TERMS

PERCEPTION:

LONG PAYMENT TERMS

REALITY:

LONG PAYMENT TERMS Diageo, the European spirits company, now asks for 90 days to pay its bills… Mondelez, Mars, and Kellogg seek 120 days…

April 6, 2015

Source = Joint Small Business Credit Survey Report, 2014 Federal Reserve Banks

• f New York, Atlanta and Philadelphia

https://www.newyorkfed.org/medialibrary/media/smallbusiness/SBCS-2014-Report.pdf

REALITY:

LONG PAYMENT TERMS

Tactical Recommendations

BE TRANSPARENT THROUGHOUT THE PROCESS

GOAL: Convey that winning your business is possible

• Outline your process up front
• Provide a timeline with milestones
• Be specifjc regarding vendor selection criteria
• Divulge who the decision makers are (if not by name by role)
• Convey number of suppliers under consideration
• Provide case studies of similar relationships you have built with SMBs
• Divulge why you are looking for a new supplier
• Be specifjc regarding quantities

SIMPLIFY YOUR PROCESS

GOAL: Increase the likelihood more SMBs participate

• Only ask for information that is critical to the specifjc supplier qualifjcation process
• Break lengthy supplier questionnaires into smaller chunks

HUMANIZE YOUR PROCESS

GOAL: Build trust and reduce downstream confusion

• Leverage phone communication early in process
• Provide specifjc Procurement and Engineering contacts
• Provide feedback

CONSIDER SHORTENING PAYMENT TERMS & OFFERING FINANCING

GOAL: Minimize your risk. Ensure your suppliers have sufficient working capital

• Create special program with reasonable payment terms for SMBs
• Consider adopting a Supply Chain Finance Solution (reverse factoring)

Offering Financing Options (REVERSE FACTORING)

Financial Institution Supplier Buyer

• 2. Invoice Approval
• 3. Factor Pays

Invoice net of financing fee paid by Supplier

• 1. Invoice
• 4. Payment to

Factor 90+ Days

How THOMASNET.com can help

Our singular focus since 1898: Making it easier for buyers and engineers to find the right suppliers

Our THOMASNET.com FREE Platform

• Access to over 700,000 Commercial & Industrial

suppliers in North America

• Shortlist and qualify by region, certifications,

and diversity-ownership

• Evaluate and compare suppliers based on

capabilities

• Create, save & share suppliers shortlists
• Send RFI/RFQs to multiple suppliers at once

• RFI follow-up from THOMASNET
• Integrate and identify all

your Approved Suppliers within our platform

• Team-level sharing &

collaboration tools

Our THOMASNET Corporate Edition

Fortune 100 Supplier Initial RFX Event Using THOMASNET.com Corporate Edition

26

Supplier Responses

219

# of Suppliers in Event

Fortune 100 Supplier Most Recent RFX Event Using THOMASNET.com Corporate Edition

70

Supplier Responses

14 2

# of Suppliers in Event

Questions & Answers

Ed Edwards eedwards@thomasnet.com 212-629-2177