Page 109 - DMGT525_MATERIALS_MANAGEMENT

Materials Management

Notes The modern management theory and world-class manufacturing call for a long-term, almost a
lifetime, association with the vendor. This also means that there will be fewer vendors but these
will be dedicated venders—almost as a part at the organisational family.
Until the present and even now, the Indian Industry has not given/is not giving much attention
and importance to vendor relations. The emphasis, if any, has been on vendor selection and on
monitoring the performance of the vendors through a vendor rating system. Vendor is an entity
that is, generally, taken for granted. The attitude is: All said and done, the vendors for the
company may change over a period of time. They may change to another business; some of
them may not give the desired performance in quality, delivery and price, and therefore, one
should always expect a drop-out rate in the vendors’ list of the company. In any case, a continuous
programme of developing vendors and of selecting new vendors, if and where necessary, should
be in existence in any organisation.

Self Assessment

Fill in the blanks:
13. A good vendor is an ………… to the company.

14. Good relationships with the vendors pay ……………….
15. The ……………. for the company may change over a period of time.



Case Study Turning Vendors into Partners

epaton, a data protection company based in Marlborough, Mass, was about to take
off, and COO and CFO Bob Iacono needed a new headquarters. The new space had to
Sbe about three times larger than his current one, furnished, and move-in ready, with
all of the special electrical and air-conditioning facilities that high-tech firms require. And
he wanted his rent to remain more or less the same. Who would help him find it?
He began meeting with brokers from some large corporate real estate firms. But in meeting
after meeting, Iacono came away feeling as if they were reading from a script, one in
which his role—the scrappy little fellow thrilled that the big-shot real estate executives
could remember his name—had been plotted out ahead of time. Every office they showed
him was wrong. “I was looking for 20,000 square feet, and they were used to renting in
100,000-square-foot increments,” Iacono says. After two months and eight brokers, Iacono
began to wonder if he’d ever find what he was looking for.

Then, his banker and lawyer recommended him to talk to an outfit called T3 Realty
Advisors. Iacono had never heard of T3. But he liked what he saw. For one thing, T3
worked only as a buyer’s broker—so it had no built-in incentives to fill its own buildings
and no need to scratch the back of financing and construction partners. What’s more, it sent
at least two brokers to meetings, ensuring that more than one person was on the case.
Assigning multiple brokers to each client is part of self-defense, says Roy Hirshland, T3’s
CEO and cofounder. “Early-stage clients tend to be very frenetic and require a ton of
handholding,” he says. Having more than one person assigned to each account means
more hands to do the holding. Entrepreneurs also need more support than larger companies
because they often have no one working on facilities management and may not even have
an office manager.
Contd...

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