Suppliers and Service Providers

We know that for our company to provide its services, we need various stuff that we buy from external suppliers. For example, the paper tissue that are provided in washrooms are bought from outside. The lamps that are used to illuminate the terminal are bought from outside. The baggage trolleys that passengers use to carry their baggage within the terminal are bought from outside.

In short, our company buys a lot of items and stocks from external suppliers for use in our services. The quantities are large because the requirements are heavy and regular. So for the suppliers who supply these stuff, our company becomes an important customer who gives them a lot of business.

When it comes to equipment and systems such as the equipment used for air ground communication, runway lighting systems, baggage screening systems, CCTV systems etc., these are also purchased from external suppliers. Although these requirements are not regular, they arise when development projects are in progress where new systems are installed or old systems are replaced. Spare parts for such systems which are required regularly are also provided by the same suppliers. The suppliers of these systems make a lot of business by supplying to our company.

Similarly, we rely on external service providers to provide certain services at the airports. Not all services are provided by company employees. For example, the janitorial services are outsourced and companies that are specialized in those services deploy their staff for a fee to provide janitorial services at the airports. The food courts and restaurants in the terminal that are used by passengers and visitors are run by external companies engaged in the food & beverage business, contracted by our company to run the outlets at the airports. To provide Wi-Fi facilities and Internet access within the terminal the company may have to lease certain facilities from telecommunication service providers. So, the companies that provide these services to us for a fee make a lot of money from it because the requirement is regular and the scope is large.

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Now all these companies that supply goods and services to our company have their own employees, their own business goals to achieve and have their own problem of surviving in a competitive market. Our company selects them through public bidding and the quality of their past supply and service is also taken into account. The share of business they get by dealing with our company may be large. Therefore they would be interested in securing the opportunity to supply or serve our company continuously so that they could continue to pay their employees, make profits and grow.

If they lose business from our company for some reason, it may seriously affect their profitability. This is particularly true in the case of small companies and those who are new to the trade. Therefore the well-being of our company directly affects their well-being and retaining the opportunity to do business with our company would be something that all of them would be interested in.

Similarly, while obtaining their supplies and services, if we do not properly honour our part of the contracts, then again these parties will be affected. For example, if we do not make the payment in time for a consignment of goods that has been supplied, that supplier’s cash flow will be affected and would create the need for him to overdraw from his bank and things like that, all of which would adversely affect his business.  Therefore even while having our business if we do not discharge our part of the business agreements properly the suppliers and service providers would be seriously affected. Even in the case of well-established suppliers and service providers who may be able to withstand certain delays would still feel the punch and form an adverse opinion about our company. The word would go round and sooner or later our company’s supply chain would be affected.

So, in this manner the companies and organizations that supply goods and provide services to our company also become our stakeholders.