Resolving a Supplier Crisis for a Transformer Manufacturer

The Challenge

In an era of global supply chain disruptions, relying on single-source procurement can be a strategic advantage for manufacturers as it both simplifies the overall procurement process and lowers costs. But doing so can pose significant risk to a company’s top and bottom lines, especially when suppliers are unable – or unwilling – to meet demand.

This was the challenge facing Company M, a market-leading control transformer manufacturer based in the United States. For years, they had relied on a single supplier for their products, but the relationship had become increasingly strained. The supplier frequently deprioritized their orders, causing lead time delays of up to 10 weeks. In addition, costs had surged – the supplier raised their prices by nearly 40% in 2023 compared to 2021 – eroding Company M’s pricing advantage and leading to a loss of market share.

These issues affected the company’s bottom line and frustrated customers. “Not only did we lose almost half of our customers for that product line, but the delays and poor performance were also damaging our brand reputation. It put our core business at risk. That was the tipping point for us,” said Z, a VP of Sales, Marketing and Engineering at Company M. “We knew we needed a solution, but we didn’t have the resources or in-house expertise to find the right one.”

The Solution

Z reached out to Kenneth at SPARKD Partners for help leading the sourcing and procurement for a new supplier. “I’m a big believer in processes and methodology,” explained Z. “Ater our first conversation, I knew he had a solid process in place that would get the job done. And I was right – he did get us the result we needed.”

To find the right supplier for Company M, SPARKD used a 7-step strategic sourcing framework, starting with an in-depth analysis of the market, product and spend before reaching out to suppliers worldwide. Kenneth worked closely with Z and his team to understand their requirements and geopolitical risks before narrowing down 41 potential suppliers to 12 shortlisted candidates, and ultimately to 3 finalists. This structured evaluation process included price and technical evaluations, as well as in-person site visits.

While price and company size were key factors, it was equally crucial to consider other elements such as supplier capacity, growth potential and transparency – these are crucial indicators whether the supplier would just be another vendor, or a true partner to Company M.

“We don’t always recommend the biggest company on the market to our clients,” Kenneth said. “What matters the most is finding the right fit, based on our knowledge of our clients and their needs. Often, success comes down to finding the right match of personalities and bringing them together.”

The final three not only offered the most competitive prices but were also the most closely aligned with Company M’s specifications. After careful deliberation, Company M awarded the RFP to one of the finalists.

“The last three were very different in terms of company size and characteristics,” Z said. “It was a difficult decision, but Kenneth served as an excellent sounding board and brought his technical and commercial knowledge of procurement to the table. He stayed involved until the very end.”

“What matters the most is finding the right fit, based on our knowledge of our clients and their needs. Often, success comes down to finding the right match of personalities and bringing them together.”

- Kenneth Tan, Managing Director at SPARKD Partners

The Result

Company M now has a new supplier, and the results have been transformative. Shipments are being delivered significantly faster, cutting down overall lead time from 12 to just under 4 weeks. The new partnership is also more cost-effective, saving Company M an estimated USD90,000 a year.

“The cost savings and improved delivery will help mitigate the risks of single-source procurement, and stabilize their supply chain,” said Kenneth. “But beyond that, this stability will allow them to rebuild their reputation and set them up for future growth.”

The project has also given Z and his team a new perspective on supply chain management. “When we first approached Kenneth, our only goal was to find a new supplier that could deliver on time,” said Z. “But he didn’t just hand us a list – he challenged our thinking. He helped us see the importance of finding the right fit that would support both our present and future needs.”

“When we first approached Kenneth, our only goal was to find a new supplier that could deliver on time. But he didn’t just hand us a list – he challenged our thinking. He helped us see the importance of finding the right fit that would support both our present and future needs.”

- Z, VP of Sales at Company M

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