Modern Supplier Relationships

Successful companies treat suppliers and customers as partners.

In old, adversarial producer-supplier relationships, the buyers pushed for lower prices and suppliers pushed for just the opposite. In today's era of systemic innovation characterized by the need for speed and flexibility all along the value chain suppliers and customers are tearing down walls.

 

State-of-the-Art Supply Chain

8 Best Practices of Successful Companies

7 Principles of Toyota Production System (TPS)

 

 

 

 

 

 

Team Up with Suppliers

If your company really wants to operate efficiently and win customers you should team up and build synergy with your suppliers rather than bargain with them... More

 

Partnerships

4 Ps

Synergistic Partnerships

 

 

 

 

Develop Sourcing and Contracting Strategies

Form lean supplier partnerships

Build an integrated supplier network

Build a supplier data warehouse

Involve suppliers earlier in new product development

Use supply chain assets collectively

Use your resources to help a supplier

 

 

 

 

 

Develop Key Competencies Across Your Supply Chain

Understand key elements of customer value management, key value drivers, and value enablers

Evaluate risk and value in your supply chain

Develop supply chain value proposition

Identify critical success factors

Consider implications to key stakeholders

Develop a lean supply chain strategy according to organizational goals and objectives ( Example)

Manage corporate cultural differences in the supply chain and harness the power of diversity

 

State-of-the-Art Value Chain

IT-powered Value Chain

Deming's 14 Point's Plan for TQM

Six Sigma

Extended Enterprise

Virtual Integration

3 Action Areas

 

 

 

 

 

 

If you are building a fast company, get your suppliers to move fast as well.

 

Fast Company

 

 

 

 

 

Build trust into your supply chain to receive more value from the suppliers in terms of costs, quality, technology, cycle time, and more.


Trust as a Source of Competitive Advantage

 

Leanest Value Chain example - joke, funny picture, boy sucks milk

 

 

 

 

 

 

Green Procurement

Many large companies have launched comprehensive and innovative environmental programs on their own, not just for themselves but for their suppliers as well, most of whom are SMEs. This initiative, known as "Green Procurement" or "Greening the Supply Chain", means that the large corporations are using their purchasing power to ensure that their suppliers, which could be anywhere in the world, meet certain environmental requirements.

 

Circular Economy

Sustainable Business

Circular Business Models

Green Business

Green Procurement

 

 

 

 

 

When there is a supplier performance problem, don't replace them. Keep them and help them improve instead.

 

Continuous Improvement Firm (CIF)

 

 

 

 

 

 

 

 
 

 

Strategy of Lean Production

Dealing With Cultural Problems

IT Solutions Are Not a Technology Fix for Corporate Culture Problems. IT solutions may help you break down internal silos and support collaboration between customer service, management and product development. In addition to helping you respond more quickly to changing business demands, better management of the service side will give you a more complete picture of your customers. That, in turn, will help you better serve customers and create long-term loyalty. SCM software is not a technology fix for a corporate culture problem however; you should only look at it if your internal business processes will support it.3

 Case in Point  Procter & Gamble

P & G reorganized its product supply chain into a superfunctions unit by combining formerly independent functions of purchasing, engineering, and distribution. A product supply manager was created for each division and the functions report to him. These measures reduced flow time and inventories, and increased on-time delivery and quality.

 Case in Point  GE

GE actively draws on the experience of its various suppliers when designing new products. It also works with suppliers to teach them what it know about building winning organizations.

Established in 1995, GE Equity, a business unit within GE Capital, invested nearly $4 billion in 300 businesses by 2000; of those 40% represent opportunities that emerged inside GE; two-thirds of ventures sell products and services to GE. Currently GE Equity invests between $1.2 billion and $1.5 billion annually in ventures.

Value investing using corporate venture investments to help GE businesses grow is the main mission of GE Equity. Ideally, each and every of GE Equity's investments adds value to both GE and the start-up. Before investing in a venture, GE Equity determines if a synergetic relationship between the venture and one of more of GE's businesses is possible.

One of the goals of GE Equity is to extend GE's management and operating systems to the portfolio companies. GE Equity also created Community.com as a portal for the companies in which GE Equity has invested so they could come together and interact. Using this web-tool, the companies are able to sell to one another and take advantage of GE's purchasing power... More