What to do when your single plant customer cuts orders

The schedule from the plant came in at half of last month's. Nobody in purchase will say if it recovers. If one plant takes most of what you make, the answer is the same either way. Work out the next three buyers for your machines and your skills, one in your own belt and two outside it. Start talking to them now, while the big order still pays the wages. A unit that starts looking after the order has fallen sells from a weak position, and buyers can tell.

Is this a one-customer business, or just a big customer?

Add up the last twelve months of invoices by customer, and run two tests. Is one buyer more than half the total? And if that buyer stopped for three months, could you still pay the wages and the loan instalment? A yes to the first, or a no to the second, makes you a one-customer business. Either is enough.

Count carefully. If your three buyers are all tier-one suppliers to the same truck plant, you have one customer with three names. When the plant's schedule moves, all three move with it, in the same week. Around Jamshedpur and Bokaro, covered on the Jharkhand page, many units sit beside one plant, so a failed test is common, not careless.

Signs the order is about to fall

The cut shows up in other places before it shows up in the schedule:

• Schedule revisions arriving mid-month, each one lower than the last.
• A request to quote again for a part you already make, which usually means the buyer is testing another source.
• Payments slipping by a week or two with no reason given.
• A model being phased out. Dealers and the trade press hear of it before the purchase team tells you.
• The purchase officer who knew your unit moving to another department.

Two of these together are enough to start the search.

The next three buyers, on one sheet

Write one row for each buyer, with real company names, not categories. The rows below show what goes in each column.

Buyer one is the fastest to start and the least likely to replace your volume. Buyer two can replace it, and takes the longest. Buyer three keeps the machines running while the other two take shape. You need all three rows, not the one that feels easiest.

Which row to start with

If payments are slipping and cash is the worry, start with buyer one. A maintenance team that needed a spare yesterday is quicker to order and quicker to pay than a large plant's schedule. If the schedule has halved and shows no sign of returning, open buyer two now, because its approval takes longest, and let buyer three fill the machines meanwhile. If the cut is a planned shutdown with a restart date, start none of them in a hurry. You need working capital for the gap, not three new buyers.

Whichever row comes first, the new buyer's first look at you is a one-page capability note. Plant buyers in Durgapur and Asansol who have never heard of you sets one out line by line. Send it with a sample part in a material that buyer uses, so the note has something to stand on.

For example: a press shop in Gamharia

Imagine a sheet-metal press shop in Gamharia making pressed brackets and cross-members for one tier-one supplier to the truck plant. The details are illustrative.

When truck demand fell, the owner made two moves. First he offered his one buyer a lower price to protect the volume. Then he put up a marketplace listing for "sheet metal job work" and waited. The price cut became the new price when volumes came back. The listing brought one-off enquiries from far away, mostly for sizes his presses could not take.

The next time the schedule dipped, he began with the sheet instead. For buyer one, he listed the maintenance teams of two private plants in Saraikela-Kharsawan that bought guards, covers and brackets from Kolkata. For buyer two, he picked three tractor component makers who pressed parts in the sheet thicknesses he already handled. For buyer three, a larger unit in his own estate needed press capacity on the night shift. He wrote a capability note, found a named engineer at each company, and sent a sample part to the tractor makers. The samples cost about ₹21,000 in steel and press time. Only one maker asked for a second sample, and the first order from it was small. The maintenance buyers paid sooner but ordered little. The listing stayed up, as somewhere his name could be checked. And he stopped defending the old customer's volume with price cuts.

Keep the main account safe while you look

Hold quality and delivery to the main customer exactly where they were. It is still paying the wages, and a late lot now hands it a reason to move faster. Keep your best setter on its job, and make samples for new buyers on the second shift.

If your parts are made on tooling or to drawings the main customer owns, those parts are not yours to sell. Sell your machine hours instead, and leave buyer two until you have a part of your own to offer. To work a longer list through introductions rather than cold calls, see finding a second buyer when one plant buys most of your output.

Run the two tests on last year's invoices

Pull out last year's invoices and add them up by customer. If either test fails, fill in the three rows with real company names and pick the row the cut tells you to start with. If you want the named list built, that is prospect research and list development, and tell us what you need is where it starts.