International dispute resolution
What do business owners do when they receive defective parts and materials from international suppliers? Very quickly, supplier issues can affect the overall business and can become an unrecoverable and expensive problem.
International supply is a tried and tested way of creating commercial advantage. However, the risks need to be managed even the best laid plans can become problematic when long distances are involved. The difference between supplier choices are how they respond when they make mistakes. Ultimately it is the business, and business owners, that feel the wrath of dissatisfied customers and experience the impact of an issue in every part of the business.
For a Salisbury (UK) company, a supplier dispute was sucking up resources and affecting the business’s reputation and cashflow.
What do we mean by resources?
Time – taking time that should be used for driving positive business
Capacity – ability to provide services, training courses and products
Money – refunds, handling hours, shipping, duties and compensation
Reputation – word-of-mouth is the lifeblood of a personal service business
Emotion and well-being – In owner-managed businesses personal resilience is critical to business success. When the owner loses faith, the rest quickly follow
Getting The Right Help
This UK business thought that they had an import duty problem. With each return of faulty goods from repair, they were incurring import duties in addition to the shipping charges. Their EU supplier wasn’t filling in the forms correctly, and the courier company systems automatically put the recipient (UK) into their credit control measures.
With each return of inadequately repaired items the UK business was incurring hundreds of pounds in import duties.
With one phone call, the situation shifted from an Import Duty Problem to a Commercial Dispute Solution.
Helping the business owner understand the problem and providing a roadmap towards closure, was an immediate relief. They now knew what they were dealing with, felt supported and included, and most importantly – could get on with running their business.
What they needed - International supply chain experience
When suppliers are in a different country, complexity gets multiplied. Time zones, language, legal frameworks and distance, all compound the problem.
However, when a dispute has persisted for a while, it’s very easy for the supplier to simply not take the calls, not answer emails and ignore the problem altogether.
In this case the UK business also had international sales to accommodate – customers in the USA and Canada who are between 5 and 8 hours behind the UK, whilst the supplier is in Europe, an hour ahead of the UK.
Business owners want solutions – they have enough ideas of their own
Understanding The Process And Tactics
Supplier issues can affect the overall business and can become an unrecoverable and expensive problem. Business owners can do a lot to prevent defective parts and materials from international suppliers becoming a major business problem.
Big-name suppliers first try to slow the process and wear down the customer
When big-name suppliers are disputed, their first action is to slow the process and wear down the customer. Most small businesses cannot sustain this and drop their claim.
They forget that Consumer Protection Laws are on their side. Just because it’s a business case doesn’t diminish their Right to have Compliant and Serviceable products supplied to them, along with reasonable assurances, at the point of sale.
Impact
- Stress – disputes are stressful, that’s a given, but waiting simply adds weight
- Workday – days start earlier (on a negative) and end later (on a negative)
- Uncertainty – when progress is slow or non-existent, doubt and uncertainty are unavoidable
- Wellbeing – the compound effect is the business owner’s energy is sapped and their wellbeing suffers. This affects everyone around them, even if they hide it well.
Operational Effectiveness Assessment
Operational Effectiveness Assessment is not for the faint hearted. It requires full transparency and disclosure across the business.
It is an opportunity to improve, to correct frustrations, understand the business better and to build a stronger team and stronger supply chain partnerships.
It sends the message that the business owners care and want long term success.
The solution
The most common request we experience from business owners dealing with disputes is that they simply want “someone to take this problem off my hands and make it go away”.
A typical proposal would include an evidence review, selecting suitable Legal services (specific to cross-border disputes) and Testing services to provide legally compliant 3rd party technical review of the faulty goods and associated documentation and the establishment of a dedicated case handler.
Altogether, this enables the business owner to get back to being a value adding component in their business and creating an experienced single point of contact for all parties involved.
In parallel to this, Total Productivity Solutions is helping them implement Quality Assurance measures for selecting alternative new suppliers and establishing a product validation procedure, to ensure that faulty goods are identified early and don’t go out to customers.
These solutions are implemented with the business owner being in full control and in accordance with business priorities but supported with experience and specialist expertise.
This small business has a strong case against their supplier, but their true strength is how they have pivoted to strengthen their internal processes and procedures to prevent a similar issue happening in the future.
They took this encouraging quote to heart.
“Your suppliers should value your custom in the same way that you value your customer’s”
Now they are considering smaller, more customer focussed, suppliers that share their values and commitment to giving the final consumer a great product and a better experience when mistakes happen.
With the new procedures in place this business is fulfilling its legal obligations and demonstrating that they are doing everything reasonably practicable to ensure that their customers get what they paid for.
This is a critical risk control measure and strengthens the Company’s position when a legal challenge is presented.
Being a member of the UK Business Advisors network enables TPS to scale to a client’s needs. Working as a Lean Organisation means that we can pass savings into our customers.
