Measuring Up Your Suppliers
Suppliers that have had experience with non-traditional purchasing concepts, alliances and partnerships definitely have an advantage when it comes to developing a deep relationship with them. Make sure you take the time to explain your procurement or supply chain strategy to them and to take the time to understand their strategy. They need to know what’s in it for them. Make it clear and measurable. Feeling good about each other will not get to the bottom line. Appearances do count. You can size up a supplier’s partner quotient a lot by actual site visits and talking to their employees at all levels. Smiling faces are better than growls and disgruntled remarks. This new frontier with suppliers has some particular characteristics. These characteristics include most favored customer contracts, elimination of incoming inspection, reduction of supplier base, early supplier involvement in design, value engineering, mutual cost reductions, targeting of non-production company costs, the complete integration of key suppliers into the business, and extensive use of cross-functional teams. This quantum leap philosophy with suppliers requires the education of purchasing personnel, rapid access to information and supplier empowerment. Cross-functional business teams and a constant dedication to improve and to reduce time to market are key elements.
Quantum leaps are usually made by actually listening to the supplier and implementing their recommendations. Rarely do they occur from internal suggestions. Suppliers are the experts on their particular parts or service not you. Heed their suggestions.
We once had a supplier recommend a simple design change on an iron casting. Not only was it cheaper but the production line was ecstatic because it was much easier to assemble. The former appendage of the old design had often broken off during assembly.