Volume 43, Issue 4 - April 2008

the Farnady Files

Too Much of a Good Thing
Why Single-Source Shouldn’t Be the Only Option  
by Dez Farnady 

Once upon a time, a long time ago—and no, this is not a fairy tale—I had a customer who gave me all of his business. We had a deal where all I needed to do was keep my price and service competitive and we both could do well. There were the occasions when he would ask for a better price but he often repaid me by telling me he had some room and would give me a break by paying more to keep the deal fair. 

Every once in a while, though, the good thing wasn’t so good. As he came to rely on me as his sole supplier he lost his leverage with everyone else—partially because he was not buying anything from anyone else and partially because eventually everyone knew he was buying it all from me. This is a small industry. No one was interested in doing him any favors. He would usually be forced to look elsewhere when it was for a product we did not stock or could not fabricate. When a large job came by with one of the products I was not able to provide very effectively we were both stuck. 

Sometimes when he needed something I could not supply I felt obligated to try buying-out the product for him. Rarely was this very profitable. By the same token, if we ran out of material or the equipment was down and he needed product, since he had little in the way of other options, my problem became his problem. In spite of all this, the relationship lasted for many years but only because it was back in the days when the product mix was much smaller. Most commercial jobs were either cut-size or tempered and either clear or one of the standard tints. So how much trouble could we get into? 

One Source, No Options
In today’s market with the myriad of products and options, no one can be all things to all customers. The single-source supplier is barely okay for a small volume business. If your supplier has a problem, be it stock or equipment, you are at his mercy and so is your business. Glass is glass and storefront, for better or worse, is storefront, and if you can’t get what you need from one vendor, you should be able to find another. Not only is it unpractical, but with giving 90 percent of your work to one vendor you will not make friends with the other three who share your remaining business. 

There may not be an easy answer for everyone, but supporting multiple suppliers is a must for all but the smallest of customers. One good thing is that now a lot more suppliers have large product packages and the same or similar capabilities as competitors. The other good thing is that they may not all stock exactly the same materials. The temperer who also insulates would rather have you give the IG to the insulator who also tempers. The guy with the big cutting capability would rather you give the boxed glass to the guy who stocks case goods while he prefers the cut-size orders.

For more examples, think of the supplier who stocks and cuts laminated as opposed to the other guy who has an autoclave and lays it up and laminates for you. The products may be similar but they are not quite the same. The price is not likely to be the same either. And, of course, all low-E products are alike except when they are not. Some suppliers carry the PPG product, some the Cardinal, some the AFG or Guardian or whoever. And believe it or not, sometimes you need one and not the other. Sometimes different fabricators buy the majority of their bread-and-butter stuff from one of the float suppliers and not much from the others so while they may have a lot of the Versalux colors they may not have a lot of the Pilkington or PPG stuff or vice versa. 

All fabricators and vendors have their strengths and their weaknesses. There are some things they do better than others. Some things make more money for them than others and as a result they will be more competitive in the areas where they want the business. If you know this, you can give them what they want and what they can do well. This allows you to balance your purchases among multiple vendors and keep them all happy. Well, that may not be true, only all of your business will make any of them happy. That is until you need something they can’t do and then nobody is happy. 

Dez Farnady serves as the general manager of Royalite Manufacturing Inc., a skylight manufacturer in San Carlos, Calif. His column appears monthly. Mr. Farnady’s opinions are solely his own and do not necessarily reflect those of this magazine.

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