Login



For PLUS+ subscription assistance, contact customer service.

Not a PLUS+ Subscriber?

Become a PLUS+ Subscriber today and you'll get access to all Supply Chain Management Review premium content including:

  • Full Web Access
  • 7 Magazine Issues per Year
  • Companion Digital Editions
  • Digital Edition Archives
  • Bonus Email Newsletters

Subscribe Today!

Premium access to exclusive online content, companion digital editions, magazine issues and email newsletters.

Subscribe Now.


Become a PLUS+ subscriber and you'll get access to all Supply Chain Management Review premium content including:

  • Full Web Access. All feature articles, bonus reports and industry research through scmr.com.

  • 7 Magazine Issues per year of Supply Chain Management Review magazine.

  • Companion Digital Editions. Searchable replicas of each magazine issue. Read them in any web browser. Delivered by email faster than printed issues.

  • Digital Editions Archives. Every article, every chart and every table as it appeared in the magazine for all archive issues back to 2009.

  • Bonus email newsletters. Add convenient weekly and monthly email newsletters to your subscription to keep your finger on the pulse of the industry.

PLUS+ subscriptions start as low as $109/year*. Begin yours now.
That's less than $0.36 per day for access to information that you can use year-round to better manage your entire global supply chain.

For assistance with your PLUS+ subscription, contact customer service.

* Prices higher for subscriptions outside the USA.

PLUS+ Customer Service Support


Customer service for all PLUS+ subscribers is available Mon-Fri, 9am-5pm Eastern time.

Email: [email protected]
Phone: 1-800-598-6067 (1-508-663-1500 x294 outside USA)
Mail: PO Box 1496, Framingham MA 01701-1496, USA



You have been logged out of PLUS+


For PLUS+ subscription assistance, contact customer service.

Need to access our premium PLUS+ Content?
Upgrade your subscription now.


Our records show that you are currently receiving a free subscription to Supply Chain Management Review magazine, or your subscription has expired. To access our premium content, you need to upgrade your subscription to our PLUS+ status.

To upgrade your subscription account, please contact customer service at:

Email: [email protected] Phone: 1-800-598-6067 (1-508-663-1500 x294 outside USA)

Become a PLUS+ subscriber and you'll get access to all Supply Chain Management Review premium content including:

  • Full Web Access. All feature articles, bonus reports and industry research through scmr.com.

  • 7 Magazine Issues per year of Supply Chain Management Review magazine.

  • Companion Digital Editions. Searchable replicas of each magazine issue. Read them in any web browser. Delivered by email faster than printed issues.

  • Digital Editions Archives. Every article, every chart and every table as it appeared in the magazine for all archive issues back to 2010.

  • Bonus email newsletters. Add convenient weekly and monthly email newsletters to your subscription to keep your finger on the pulse of the industry.

PLUS+ subscriptions start as low as $129/year*. Start yours now.
That's less than $0.36 per day for access to information that you can use year-round to better manage your entire global supply chain.

This content is available for PLUS+ subscribers.


Already a PLUS+ subscriber?


To begin or upgrade your subscription, Become a PLUS+ subscriber now.

For assistance with your PLUS+ subscription, contact customer service.

Sorry, but your login to PLUS+ has failed.


Please recheck your login information and resubmit below.



For PLUS+ subscription assistance, contact customer service.

The Wisdom of Becoming a Preferred Customer

Research and experience tells us that satisfied suppliers are more willing to provide preferential treatment to customers—treatment that can lead directly to market advantage. But what does it take to become a “preferred customer” and capture that edge?

By ·

The one constant that executive leaders will always face is a relentless pressure to improve corporate performance. Enlightened leaders understand that the link between positive relationships with suppliers and improved corporate performance is a strengthening rather than weakening one. And, these leaders understand that by satisfying the diverse needs of their suppliers, their firm stands a better chance of receiving preferential treatment from suppliers compared with firms with less satisfied suppliers. Consider the following high-profile examples.

Ford and Toyota are competing to become market leaders in the production of hybrid vehicles. As part of their development efforts both companies outsourced the production of a complex hybrid transmission system to the same supplier. As market demand for hybrid vehicles increased, Ford executives complained publicly that the transmission supplier favored Toyota when supplying transmission systems.1 Unfortunately, a demand for transmissions that exceeds the supply of transmissions prohibits the supplier from supporting the demands of both companies. What should be obvious here is that one company became the preferred customer while the other did not.

In another example that gained widespread attention, Airbus publicly accused General Electric of favoring Boeing during the development of engine technology for the next generation of commercial airplanes, a market estimated to be worth several hundred billion dollars.2 As an Airbus executive complained: “The problem we have with GE is they go to Boeing and say ‘what kind of engine should we design for your airframe?’ Then they come to Airbus and say ‘here is the kind of airframe you need to build to fit our engine.’” Complicating matters is the fact that the largest version of Airbus’ next generation of planes will compete with the largest version of a Boeing model (the 777) where GE is the exclusive engine supplier. GE officials say they will not build a new engine for an Airbus plane that will compete against a Boeing plane where GE is the sole supplier.

These two examples highlight the high-stakes competition that is taking place over who will reap the benefits of preferential treatment from suppliers—a competition that can affect success or failure at the business level. Although the examples just presented involve large, wellknown companies, the need to understand what it takes to become a preferred customer is just as critical for smaller and less well-known companies. Smaller companies must not be caught off-guard regarding what they must do to receive preferential treatment from suppliers. Failure to understand this can lead to some serious negative consequences as suppliers explicitly and tacitly decide who their preferred customers are. Because supplier satisfaction with a buying customer is primarily a function of a customer’s behavior and not size (something that will be explained shortly), smaller companies do not have to be at a disadvantage here.

This complete article is available to subscribers only.
Click on Log In Now at the top of this article for full access.
Or, Start your PLUS+ subscription for instant access.

Not ready to subscribe, but need this article?
Buy the complete article now. Only $20.00. Instant PDF Download
.
Access the complete issue of Supply Chain Management Review magazine featuring
this article including every word, chart and table exactly as it appeared in the magazine.

By ·
Download Article PDF

The one constant that executive leaders will always face is a relentless pressure to improve corporate performance. Enlightened leaders understand that the link between positive relationships with suppliers and improved corporate performance is a strengthening rather than weakening one. And, these leaders understand that by satisfying the diverse needs of their suppliers, their firm stands a better chance of receiving preferential treatment from suppliers compared with firms with less satisfied suppliers. Consider the following high-profile examples.

Ford and Toyota are competing to become market leaders in the production of hybrid vehicles. As part of their development efforts both companies outsourced the production of a complex hybrid transmission system to the same supplier. As market demand for hybrid vehicles increased, Ford executives complained publicly that the transmission supplier favored Toyota when supplying transmission systems.1 Unfortunately, a demand for transmissions that exceeds the supply of transmissions prohibits the supplier from supporting the demands of both companies. What should be obvious here is that one company became the preferred customer while the other did not.

In another example that gained widespread attention, Airbus publicly accused General Electric of favoring Boeing during the development of engine technology for the next generation of commercial airplanes, a market estimated to be worth several hundred billion dollars.2 As an Airbus executive complained: “The problem we have with GE is they go to Boeing and say ‘what kind of engine should we design for your airframe?’ Then they come to Airbus and say ‘here is the kind of airframe you need to build to fit our engine.’” Complicating matters is the fact that the largest version of Airbus’ next generation of planes will compete with the largest version of a Boeing model (the 777) where GE is the exclusive engine supplier. GE officials say they will not build a new engine for an Airbus plane that will compete against a Boeing plane where GE is the sole supplier.

These two examples highlight the high-stakes competition that is taking place over who will reap the benefits of preferential treatment from suppliers—a competition that can affect success or failure at the business level. Although the examples just presented involve large, wellknown companies, the need to understand what it takes to become a preferred customer is just as critical for smaller and less well-known companies. Smaller companies must not be caught off-guard regarding what they must do to receive preferential treatment from suppliers. Failure to understand this can lead to some serious negative consequences as suppliers explicitly and tacitly decide who their preferred customers are. Because supplier satisfaction with a buying customer is primarily a function of a customer’s behavior and not size (something that will be explained shortly), smaller companies do not have to be at a disadvantage here.

SUBSCRIBERS: Click here to download PDF of the full article.

Subscribe to Supply Chain Management Review Magazine!

Subscribe today. Don't Miss Out!
Get in-depth coverage from industry experts with proven techniques for cutting supply chain costs and case studies in supply chain best practices.
Start Your Subscription Today!

Article Topics

November 2012 · All Topics
Latest Whitepaper
Third Party Risk: Too Close for Comfort
You’ve got a handle on many of the potential supply chain "disrupters" that can paralyze your business. But the real risk is embedded in areas you may have overlooked.
Download Today!
From the December 2017
This is a comprehensive guide to services, products and educational opportunities targeted specifically to supply chain professionals. As with years past, we’re also featuring several articles we trust will offer food for thought in your supply chain throughout the coming year.
Transportation Trends: The last mile, history repeating
Economic Outlook: A Complex and Uneven Scenario for Global Supply Chains
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!


Latest Webcast
The Perfect Formula for Determining the Right Amount of Inventory
This webcast explains how the science of theoretical minimums, a new approach to inventory optimization, provides a simple and elegant way to reduce cost and increase customer service levels by monetizing time delays across the extended supply chain.
Register Today!
EDITORS' PICKS
Oracle Modern Supply Chain Experience Promises to Address Key Industry Issues
In many cases, system and data from different vendors are integrated frequently, in different...
Atradius Issues New Report on Supply Chain Risk in North America
The U.S. shows strong economic performance, but the looming risk that leadership in Washington will...

2018: The year we make meaningful progress on digital transformation
Perhaps it would have been better to describe it as a digital evolution – more of an ongoing...
Industrial and Supply Chain Real Estate Expected to Soar in 2018
Strong economy and insatiable demand for online shopping behind industrial real estate resurgence