Win-Win Supply Chain Relationships

[dot_recommends] September 22, 2021 Manufacturing Business Strategy

3 Pillars for Strengthening Your Win-Win Approach

win-win supply chain relationships require collaboration like these rowers on a crew team

 

The costs of ensuring on-time delivery for industrial manufacturing have skyrocketed. So, how can you minimize supply chain costs while fulfilling customer expectations? The answer: Strengthen your win-win supply chain relationships!

A healthy win-win supplier-company relationship will

  • Reduce costs AND
  • Increase on-time delivery certainty

 

The Costs of Strained Supplier Relations

As an industrial manufacturer, you know the cost risks of delivery mismatches.

  • Holding insufficient inventory leads to missed delivery windows.
  • Guaranteeing delivery means holding excess inventory in the supply chain.

You—and your suppliers—want to develop inventory strategies that optimize the combined costs.

An optimized supply chain means collaborating on cost, yield, quality, cycle time, throughput, and delivery.

 

How to Build and Maintain Win-Win Relationships

 

1. Motivate
Start by setting mutually agreeable goals.

  • Look at each of the factors, particularly yields, and ask whether the goals can be increased.
  • Set measurable and attainable profit growth goals.
  • Agree on benchmarks and metrics for each goal.
  • Spell out the benefits for the supplier in meeting the goals!

 

2. Communicate
While you’re setting goals, make some around ways to improve communication.

  • What measurable steps could you take to reduce or remove barriers to communication?
  • Investigate potential communication barriers around language, culture, technology platforms, and low-transparency in data sharing.
  • Implement multi-directional data sharing.

Be willing to make other changes that will improve communication.

 

3. Modify
Any superfluous steps in the processes need to be removed. Consider testing and inspection, for example.

  • Appropriate levels of testing and inspection support quality standards.
  • More than appropriate testing reduces yield unnecessarily.
  • Eliminate unnecessary steps.
  • Consolidate steps when possible.

 

Finally, make a commitment to the supplier relationship. Ensure all company leaders believe in the benefits of win-win supply chain relationships. Have some thoughts about this post? Let’s talk.

–parin

Managing Partner

 

Photo by Mitchell Luo on Unsplash

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