Much like the dairy producers who see many potential suitors vying for their business, I too am frequently solicited by prospective suppliers. My goal is to add value to your business by sharing my thought process and criteria for selecting which suppliers and nutritionists to do business with.
With the profitability of your business at hand, who you choose to do business with is a critical decision. Who needs to be on your “external management” team? Who can provide the most impactful contribution to your profitability in terms of consulting skills, products, programs and resource networks?
My mantra has been, and will always be, to strive to be an indispensable member of my customers’ external management team – one they can’t do without. Read on for insight on how to separate the “wheat from the chaff.”
Considerations in choosing a valued supplier
1. Time is money. Every time you agree to meet with someone, it is an opportunity cost on something else you could be doing for your business. So, it is important that the supplier:
- Has a set objective for the call that is understood ahead of time
- Arrives on time and adheres to the agreed-upon time allotment and meeting objective(s)
2. Understand my business needs. Much like a doctor prescribing a medication or a solution without first making a diagnosis, consulting without understanding my business needs is malpractice. Is the individual engaged in wanting to know more about your business and unique needs? Is he or she prepared with questions to better understand and gather this information?
3. Fulfill my business needs. Does the supplier have the product(s), programs and services to fulfill the needs you have? Is their proposition novel? Is it differentiated from other solutions in meeting your needs? Does it give your business a competitive advantage in the marketplace? Does the prospective supplier have a solutions-based approach? Do they have the support required behind their products to add value to your business? Do they have expertise in a given area that can be used to train your team?
4. Science-based and data-supported. The organization I work for is a science-based company. We have our own research assets and work with dairy producers across the country in validating proprietary technologies. We have the same expectations of our suppliers. They need to provide data in support of their proposition, and importantly, it must have demonstrated cost efficacy on the farm – where it counts.
5. Focused on return on investment (ROI). There is no shortage of feed additive options and services a producer may consider. The most important aspect is identifying challenges and selectively choosing the technologies that provide the best and most cost-effective resolution. Even more important is having a means to measure the expected response to determine if the ROI is being realized. It is also important to evaluate a given solution over time, as what was changed in the ration a year ago may not be working today.
6. Testimonials from the field. Does the supplier have testimonials or case studies as to how their program has benefited other dairy producers?
7. Price breaks/price risk mitigation. Does a given supplier’s proposition afford price breaks for volume purchases, early order buying, cash discounts, etc. that is advantageous compared to competitors? Do they have price risk mitigation programs, such as forward contracting that could, under certain market conditions, be preferential?
8. Quality control. Does the supplier have good quality control protocols in place? Having a good understanding of the supplier’s quality control protocols assures that the product provided can be depended upon to be consistent from batch to batch.
9. Follow-up. Last, but certainly not least, is follow-up. Did the supplier capture the information provided during your meeting and follow up on the needs expressed in a timely manner? Not providing follow-up information is a deal-breaker for me.
I feel a holistic approach is necessary when selecting suppliers. I must have conviction in the product, company, ability of the company representative and associated technical support team to add value to my business, data in support of their product, training for team members and testimonials from successful customers. I also must have value-added services associated with the product, product quality assurance, price competitiveness, expected ROI and consideration of price advantages/price risk management options.
Considerations in choosing the best nutritionist for your operation
With feed representing the greatest variable cost of production, choosing the best options to provide optimal ROI is critical. The relationship between a farm and their nutritionist is a significant one. When considering the best nutritionists for your farm, here are some questions to ask:
- Does their personality and drive match yours?
- Do they have a willingness to understand your goals and needs? Are they a good communicator? Are they a good listener?
- Will they challenge you or just be a yes person?
- Can they effectively work with your team?
- Can they be a catalyst to bring your external team together as needed to identify goals and strategies to achieve them? This team could include a nutritionist, veterinarian, A.I. technician, agronomist, custom harvester, accountant, lending institution or other partners.
- How committed and accessible will they be? How often will they be on the farm?
- How often will they walk your herd? Will they provide a report back with recommendations?
- Do they have references they can provide?
- What resources do they have at their disposal that could be of value to your operation?
- How do they keep up with the latest in technology? How do they get their information? Do they attend industry conferences/webinars held on dairy management, health and nutrition? When was the last one they attended and what were some of the things learned that they’ve applied on their farms?
- What services are provided and what consulting fees, if any, are associated with these services?
- Who pays for forage samples or other analytical work?
- Do they provide ration options and communicate the pros and cons of each? If the cost is greater or a new additive is added, ROI needs to be measured and reviewed once implemented.
- When selecting between independent and company nutritionists, it is important to know how they are paid. If there is a consulting fee, how is it structured – by time, per cow? Are there any other associated fees such as travel expenses, ration time, etc.? Do they have a custom vitamin trace mineral they use in your rations that they are compensated on? Are they compensated by a given supplier to use their product(s)?
There are a lot of dynamics involved when selecting suppliers and nutritionists. Building your external team is very important to ensure your future profitability. At our organization, we understand that our credibility and your profitability are at stake with every supplier decision we make. These key considerations help us make informed choices. Armed with these tools, we hope your decision-making becomes less of a burden and that you’re more likely to find the right fit.
