I hope that you have enjoyed the article “4 Questions To Ask Vendors’ References.”
The main point of the article is that you need to take a well-thought-out approach to doing vendor reference checks. If not done well, vendor reference checks can be worthless.
As mentioned in the article, “a vendor will never give you a poor reference.” So, if you ask dumb quesitons, you will not get any useful information. Here are some examples:
BUYER: “How well has the vendor worked out for you?”
REFERENCE: “The vendor has worked out very well.”
BUYER: “Have you had any major problems with the vendor?”
REFERENCE: “No. Nothing major.”
BUYER: “So you would recommend the vendor?”
REFERENCE: “Yeah, I’d definitely recommend them.”
What else could a buyer expect? Nothing right? Yet, this is how so many reference checks go.
So, having covered some examples of bad questions, let’s cover some good questions as well as answers that will either give you comfort or concern…
BUYER: “What’s your relationship with the vendor?”
REFERENCE: “They are perhaps our most important vendor. We have only a handful of vendors that affect whether or not we have an advantage over our competitors and they are one of them. If they fail, we fail.” (This should give you comfort)
REFERENCE: “They are our backup vendor for non-critical production materials. We use them from time-to-time when our primary vendor’s capacity has filled up.” (This should give you concern)
BUYER: “How do you interact with the vendor?”
REFERENCE: “I personally deal with them on a daily basis. We are always communicating about schedule changes and shifts in demand.” (This should give you comfort)
REFERENCE: “Well, I dealt with them primarily when we were negotiating the contract. I check in with them once a quarter to make sure that they feel the contract is going well.” (This should give you concern)
BUYER: “Describe a situation where the vendor disappointed you, and how they responded.”
REFERENCE: “There was one situation where we had to put different shipping instructions on our PO. We emailed them an order with our standard instructions on, remembered that we needed shipping done differently, and issued a change order two minutes later. They processed the original order because they didn’t notice anything different on the change order and thought it was a duplication. As a result, our shipment went out by truck and was looking to be 24 hours late. When we told them about it, they sent a partial shipment via air freight at no additional cost to us and reduced our time waiting for parts to just six hours. They then voluntarily gave us a 30% credit on our invoice for the misunderstanding. In terms of cost, that made things turn out pretty evenly for us.” (This should give you comfort)
REFERENCE: “Everything goes well most of the time. But there was this one order a few months ago where we got the wrong items on a Friday. It was clearly their fault. But when we called at 3:00, the general manager said that he was unwilling to make his crew work the one hour required of overtime on a holiday weekend to correct the mistake. So, they didn’t ship our items until Tuesday and then they forgot to ship them via air freight. We ended up receiving them an entire week late. We asked for a credit, but they refused. Since then, we haven’t had a problem, though.” (This should give you concern)
BUYER: “What are some things you wish the vendor would do differently?”
REFERENCE: “I wish they would provide me with delivery status hourly by text message because one of my other vendors in another industry does that. They assured me that they have taken my request and put it in queue to be added to their capabilities with their next system upgrade, but that won’t happen for another six months.” (This should give you comfort)
REFERENCE: “We love their quality and their service, but I really wish they would get their shipping operations organized. Every month or so, we get another of their customers’ shipments and they get ours. It’s only caused us a production line shutdown one time, but we have to keep extra inventory in case it happens again. But every time they’ve said that they’ve identified and solved the problem, it inevitably seems like this ‘switcharoo’ happens the next week.” (This should give you concern)
Would you care to share stories of reference check calls you’ve done – both good and bad? Just click the Comments link below!
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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