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

Today’s Webinar Presented By: Hosted By: Ed Edwards

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 Are addressed by getting new customers Source = techaisle

Fortune 100 219 26 Supplier Initial RFX Event Using THOMASNET.com # of Suppliers Supplier in Event Responses

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

The Importance of SMBs

6% 6% 0-4 Employees 39% 18% 5-9 Employees 10-19 Employees 20-99 Employees Manufacturing 100-499 Employees 14% 500+ Employees 17% of US manufacturers 49 % are between 5-99 Source = 2013 US Census Data employees

5% 7% 0-4 Employees 13% 5-9 Employees 10-19 Employees Business 74% 20-99 Employees Services 100-499 Employees 500+ Employees of US business 99 % services companies are between 5-99 Source = 2013 US Census Data employees

YOU WANT TO SOURCE REGIONALLY 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% 7.1% 9.0% 11.3% No Pref to Note * Source = THOMASNET User Research 2013

YOU WANT TO KEEP COSTS DOWN Average Payroll By Company Size (US Manufacturers) ** What led you or your company to seek a new or alternative supplier? (Select all that apply) * Average Payroll Employee Size per employee Top (5) Reasons % 0-4 employees $40,004 Cost Reduction 87% 5-9 employees $36,313 75% Quality or Consistency Issues 10-19 employees $40,717 New Product or Customer 63% 20-99 employees $45,769 55% Logistics (Extended Lead-Times, Inventory Issues, etc.) 100-499 employees $48,975 Single Supplier Risk Management 38% 500+ employees $61,150 * Source = THOMASNET User Research 2013 ** Source = 2013 US Census Data

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

SMB Perceptions and Realities

Natalie Menke President THE VOICE Universal Blower Pac OF THE SMB & INOHVA Pneumatics

UNDERSTAND WHO YOU’RE WORKING WITH

PERCEPTION: BUREAUCRATIC PROCESS

“(Larger companies)…will send you 100s of 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 opportunities…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 one customer…”

REALITY: PERCEPTION: LONG LONG PAYMENT PAYMENT TERMS TERMS SMBs BIG COMPANY

REALITY: PERCEPTION: Diageo, the European spirits LONG LONG company, now asks for 90 days PAYMENT PAYMENT to pay its bills… TERMS TERMS Mondelez, Mars, and Kellogg seek 120 days… April 6, 2015

REALITY: LONG PAYMENT TERMS Source = Joint Small Business Credit Survey Report, 2014 Federal Reserve Banks of New York, Atlanta and Philadelphia https://www.newyorkfed.org/medialibrary/media/smallbusiness/SBCS-2014-Report.pdf

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  Communicate timeline and process changes  Let suppliers know if they have been eliminated from consideration along the way  Let them know why they were eliminated 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)

Financial Institution Offering 2. Invoice Approval 3. Factor Pays Financing Invoice net of Options 4. Payment to financing fee ( REVERSE Factor 90+ Days paid by Supplier FACTORING) Buyer Supplier 1. Invoice

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 •

Our THOMASNET Corporate Edition RFI follow-up from THOMASNET • Integrate and identify all • your Approved Suppliers within our platform Team-level sharing & • collaboration tools

Fortune 100 Fortune 100 14 219 2 26 70 Supplier Supplier Most Recent Initial RFX Event Using RFX Event Using THOMASNET.com THOMASNET.com Corporate Edition Corporate Edition # of Suppliers # of Suppliers Supplier Supplier in Event Responses in Event Responses

Questions & Answers

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