Then it starts to go wrong… the contract is usually seen by the supplier as the maximum deliverable not the minimum and in any case it is hard to resource, so buyers tolerate poor supplier performance. Wouldn’t it be nice to ensure your strategic suppliers work in true partnership with mutually supportive goals? How about year on year price downs? What about year on year quality improvements?
This call to do more with less isn’t new, so isn’t it about time we actually started doing more and talking less?
The answer is yes, but the process is not easy and some help and input on getting the best out of a supplier network is usually needed.
Put simply, being able to negotiate a commercial deal does not mean a buyer is able to manage a relationship, nor does it make sure that the supplier continues to improve and deliver ongoing benefits.
It is becoming more important for organisations to establish strategic ties and collaborative relationships with key suppliers to overcome the myriad of challenges and increased risks associated with a more volatile operating environment.
We can build dynamic Supply Chain Programmes to improve your supplier capabilities and enable them to provide better quality and delivery with lower cost, and on time. At the same time these programmes improve supplier profitability as an extension of the benefits delivered to their customers.
We build a supply chain network containing 8 to 10 of your key suppliers to improve their performance, and define a roadmap with actions leading to improved processes and outcomes for both buyer and supplier. We work with them to identify benefits and put in place actions – the benefit of the networks is that the return of doing so is multiplied by the number of participant companies while the costs are shared between them. Furthermore, a supplier which has retained its ability to improve can further develop its own suppliers, with the effect being a more competitive supply chain.
We can help you build a funding plan; programmes can be funded in a variety of ways but in any case, a formal agreement should be developed with clearly defined expectations around KPI improvements, cost reduction requirements & business growth plans. Financial benefits accrued from Supply Chain Improvement Programmes should be reasonably shared between Buyer & Supplier, creating a “virtuous circle” of continuous improvement and strengthened collaboration.
The top 3 challenges cited by Supply Chain Managers are a lack of improvement competences in the supply chain, insufficient alignment between the buyer and customer and an over emphasis on price reduction rather than overall supply chain cost reduction.
Under these programmes we provide an integrated framework of business support and related activities tailored to specifically meet the needs of your supply chain and deliver mutually assured benefits.