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Working with Vendors and Managing Your Supply Chain

Build long-term, collaborative relationships to increase competitiveness.

By Tonya Vinas, Writer, Editor, Researcher, 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.

 

Choose the right partners

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

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