Large companies trying to adapt to a more competitive environment are rapidly learning that they are just as dependent on a healthy small business sector, as a small business is on them.
The growth in out-sourcing and the spread of Worlds Best Practice is forcing a change in the relationship. It became evident first in manufacturing, as that sector began to react to lower protection in the late 1980's and is spreading to all sectors of the economy.
Larger businesses should offer longer contracts and loyalty to small businesses so that they have planning certainty. Larger companies should talk to their suppliers about the business. They are not in competition but should be working together.
Although these ideas may seem revolutionary to some in the retail and services industries, they are becoming common in manufacturing. Rapid internationalisation of business in the last five years has been a powerful force in changing relationships between big and small companies.
A reduction in the number of small businesses that big companies deal with is an inevitable consequence of closer relationships.
The Damien Cole Group has always maintained a Nominated Suppliers Policy which states "that any nominated supplier can be assured of our business whilst product, service and value remain constant". We do not change suppliers on the basis of price, and only do so after discussion with our nominated supplier.
With this policy we hope to work together on Worlds Best Quality and Productivity and gain benefits that would be impossible under a regime of confrontation and arm twisting on price.
As a natural progression of this policy we are also selective with regards to our client base. Those of our clients who would seem to persist with the policy of not being loyal and continuously shopping for price, in my mind are best left to shop among the suppliers who operate on that system.
We can see sufficient growth prospects in doing business with those with whom we believe we can form a good working relationship.
Small business in Western Australia (because of its isolation) is still having difficulty in coming to grips with a management practice that has been in place for many years elsewhere.