By: Peter Sheren
Businesses in the 21st century exist in a dynamic, supply chain dependent environment where “Partnership” is a key component of mutual success. Business success depends in a large part on the suppliers or “external providers” a company selects to augment their internal core capabilities. In the Supplier – Customer relationship, a level of trust in each party to follow through on commitments made is critical to mutual success.
As a customer purchasing key, critical and often sole sourced components for complex devices, you need to rely on commitments from your suppliers to improve as this will go a long way to helping you improve. The elements to focus improvement efforts on which will provide the most immediate benefits are Quality, Cost and Delivery (QCD). Simply ordering or demanding a supplier improve each of these by an incremental X% and then getting out the proverbial whip to ensure compliance is counterproductive and often leads to broken relationships and, at best, temporary gains.
An effective way to create full accountability in your supplier base is to form Supply Chain Improvement Team. I choose the term “Team” rather than “Project” because a project typically has an end date or closure and the improvements we are talking about are continuous. Team membership is comprised of internal engineering, materials, and quality staff, and technical, operations and management from the supplier companies. An internal leader is then appointed whose tasks will be to schedule meetings, keep minutes and actions, and report results to upper management.
Most permanent supply chain QCD improvements involve joint efforts and tradeoffs between multiple areas of each organization. Sometimes by making a slight adjustment in the product design or specification can lead to tremendous, incremental cost savings opportunities. The team approach drives these to the surface and ensures they are fully considered before being discounted. The decisions made are visible to all key participants and include senior management from all the organizations involved.
The motivation for each supplier to fully participate in the team will be immediate by sharing in the cost savings gained and long term, through a mutual commitment to continue the supplier/customer partnership during the evolution of new products and future business opportunities.
At Storti, we believe that if we are not offering you value than we aren’t doing our job. By implementing a high quality QMS system we can significantly lower your risk and save you money at the same time. To learn more about our services and how we can help please contact us at email@example.com or 844-478-6784.