If you’re a cheese manufacturer and a cheese buyer has requested something not currently made by your company, how do you respond? The choice you make may have lasting impact on your long-term relationship with the buyer. The buyer is looking for sincere answers, so don’t say you are interested in providing the unique item if you know your company doesn’t have the resources or the willingness to execute. However the request may be just the opportunity your organization is craving for needed growth.
Don’t let yourself and your company be caught unprepared. Ask yourself, does your company have a protocol for evaluating these types of requests when they are presented? If not, this is something that your company needs to develop so that there is alignment on how to process such requests. Having an efficient, well-defined evaluation process will provide the buyer with the sense that the request is being considered seriously. As a result, the buyer will be willing to share more information which in turn improves your company’s potential for success.
What are the buyer’s expectations for the product development timeline? Will the seller own the developed product or will the buyer claim rights to the product i.e. intellectual property? What does successful product development look like in terms of the product supplied to the buyer?
Accommodating the buyer with a timely feedback involves broaching the tough questions early in the evaluation. This approach will help avoid misconceptions of where each party stands. The biggest hurdle to effective question and answer exchange can be the issue of confidential information protection. If either party has these concerns, executing confidentiality agreement (CA) as soon as possible should be step one.
Once the CA is executed, the first question you need answered is the physical description of the product. The physical description should include all the performance criteria such as legal name (if any applies), analytical requirements, serving size, nutritional requirements per serving size, shape, size, color, texture, microbiological standards and any other functionality deliverables required by the buyer. Secondly you need the potential sales volume estimate and thirdly a date when the product is needed. The answers to these questions nail down the scope of the objective.
If your company thinks it can provide a solution to the defined objective, another list of questions should be formulated for presentation to the buyer. In the event that capital is required for new equipment, would the buyer be willing to own the new equipment? What are the buyer’s expectations for the product development timeline? Will the seller own the developed product or will the buyer claim rights to the product i.e. intellectual property? What does successful product development look like in terms of the product supplied to the buyer? Will the buyer commit to purchase minimum volumes? What is the earliest milestone by which price negotiation for the product will be completed?
Using this evaluation protocol will demonstrate your company’s project management competency to the buyer, thus providing the buyer with confidence that they have selected the right supplier. Your company will be able to efficiently execute the development of the new product and both parties will benefit.
Dwight Krampien worked for many years as a cheese buyer for a major food company. He is experienced in numerous types of cheese manufacturing processes and in the equipment used in the production of cheese. He holds degree in foods science & technology from the University of Wisconsin, Madison.
