ROAD TO GROWTH AND PROFITABILITY STARTS WITH EFFECTIVE SUPPLIER RELATIONSHIP MANAGEMENT

摘要

Supplier management has a lot more to it than meets the eye. Many consultants and managers thought of supplier management as a tool to reduce their annual spend. Though this line of thinking is right on the mark, there is a lot more here that we are overlooking. The supplier relationship is not just about consolidating the supplier base, establishing long-term contracts and leveraging spend potential. It is also about new product development, design for manufacturing and assembly, effective production planning and total quality management. Traditional customer-supplier dynamics are changing with the coming of new models of relationship, such as Vendor Managed Inventory and B2B Exchanges, and the growing emphasis on extending operations initiatives such as Six Sigma to suppliers. A company looking to improve the quality of its product may turn to Six Sigma or Just-In-Time production approaches. However, this company cannot achieve any significant quality gains unless its suppliers, in turn, can gear up to the raised operational expectations. A supplier would require business commitment backed by a trustworthy relationship for it to make any significant investments to improve its operations. Most companies with a significant spend in acquiring products and services are caught in a whirlpool today, unable to decide what should be their purchasing and supplier relationship strategies. Companies are asking questions such as - What should they make and what should they outsource? How extensive should their supplier base be? How should they collaborate with suppliers on production planning and new product development? What Exchanges should they join? How should they select suppliers? What software systems should they invest in? Through strategic outsourcing and seamless collaboration with key suppliers in day-to-day operations management and new product development, some companies have achieved up to 30% reduction in total material spend and reduced new product development time by up to 40%.