Supply Chain Management

EMS Technologies, Inc. J.D. Edwards & Company Mapics Inc.

Metatec International Swisslog Holding AG USF Corporation

Wesco International Inc.

Guide to Working with Vendors and Managing Your Supply Chain

Build long-term, collaborative relationships to increase competitiveness.
By Tonya Vinas

Establishing and managing robust supply chains is a must for success in today's global manufacturing economy. Suppliers can make or break a manufacturer. A successful supply chain has these characteristics:

1. All members benefit equally. To motivate suppliers to help reduce costs and increase sales, successful companies reward them with a fair share of savings or profits.
2. A strong communication system. Whether it's notifications via e-mail, visual clues or even verbal cues, a strong communication system is must.
3. Long-term commitment. Building relationships for the long haul means not abandoning a supplier because another company is slightly cheaper.
4. Collaboration. Getting input from suppliers on new products, shipping, pricing, etc., reduces waste done the road.

Action Steps

The best contacts and resources to help you get it done

Choose the right partners Which suppliers best serve your needs? Narrowing your list is the first step in successful supply-chain management.

I recommend:  Get educated with articles and Web seminars from the Institute for Supply Management. Find suppliers via a directory from Supply & Demand Chain Executive Magazine.

Collaborate and communicate Set up systems to ensure collaboration and communication. That means building in processes such as regular meetings, sign-off requirements, collaborative design systems, real-time inventory tracking, and even an onsite rep from your supplier.

I recommend:  Use a tool from Industry Week Magazine to benchmark your supply-chain model against the best-managed plants in North America and copy what they do.

Focus on continuous improvement Setting goals (i.e., cost reductions, improved delivery time, decreased warranty costs) and tracking performance will let you know if suppliers are continuing to bring benefit to your company.

I recommend:  Choose how your supply chain will be measured. A variety of metrics exist – find them in the book Streamlined: 14 Principles for Building and Managing The Lean Supply Chain by Mandyam M. Srinivasan.

Tips & Tactics

Helpful advice for making the most of this Guide

• Get outside help if you need it or don't have the time to manage your supply chain. Software vendors often provide consulting services along with their products.
• Be aware that using overseas suppliers can have hidden complications such as added transportation costs, political disruptions, or varying compliance rules.
• Even while focusing on ongoing continuous improvement via metrics and benchmarking, choose 'spot projects' for improvement. For example, some manufacturers have built such trusting relationships with their suppliers that they no longer inspect incoming materials, which decreases costs and improves cycle times.