Comments on: Which suppliers are most critical to your supply chain? http://blog.kinaxis.com/2009/02/which-suppliers-are-most-critical-to-your-supply-chain/ Tue, 07 Feb 2012 20:48:00 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Tim Albinson http://blog.kinaxis.com/2009/02/which-suppliers-are-most-critical-to-your-supply-chain/comment-page-1/#comment-2992 Tim Albinson Wed, 11 Feb 2009 18:12:13 +0000 http://blog.kinaxis.com/?p=872#comment-2992 Today, more and more companies need to assess their suppliers with regard to sustainability and broader CSR goals, as well. Most of a company’s carbon footprint is embedded in its supply chain, so as you work to implement an environmental sustainability platform, it is important to evaluate your suppliers from this standpoint. Today, more and more companies need to assess their suppliers with regard to sustainability and broader CSR goals, as well. Most of a company’s carbon footprint is embedded in its supply chain, so as you work to implement an environmental sustainability platform, it is important to evaluate your suppliers from this standpoint.

]]> By: John Westerveld http://blog.kinaxis.com/2009/02/which-suppliers-are-most-critical-to-your-supply-chain/comment-page-1/#comment-2988 John Westerveld Tue, 10 Feb 2009 15:51:23 +0000 http://blog.kinaxis.com/?p=872#comment-2988 Christian, you raise some great points. The idea of assessing your suppliers based on their contribution to revenue is really intended to give you a list of which suppliers to look at first. It's a way to prioritize your assessment of supplier risk. As in all things, there are exceptions and you identified one of them. In many cases, the flagship product will drive the highest revenues so a supplier of a unique component that is critical for that product will be at or near the top of the list...but not always. Having a good understanding of your products and your supply base is critical to a solid risk management approach. Thanks for the tip on the book. I'll look it up! Christian, you raise some great points. The idea of assessing your suppliers based on their contribution to revenue is really intended to give you a list of which suppliers to look at first. It’s a way to prioritize your assessment of supplier risk. As in all things, there are exceptions and you identified one of them. In many cases, the flagship product will drive the highest revenues so a supplier of a unique component that is critical for that product will be at or near the top of the list…but not always. Having a good understanding of your products and your supply base is critical to a solid risk management approach.

Thanks for the tip on the book. I’ll look it up!

]]> By: Christian Verstraete http://blog.kinaxis.com/2009/02/which-suppliers-are-most-critical-to-your-supply-chain/comment-page-1/#comment-2986 Christian Verstraete Tue, 10 Feb 2009 09:31:17 +0000 http://blog.kinaxis.com/?p=872#comment-2986 I believe there is another way to look at the importance of suppliers and this is related to the strategic nature of the supplier. Let me give an example. If a supplier produces a component or ingredient that makes your product unique, this supplier is of critical importance for your business, particularly if the product is a flagship product. On the other hand, if the supplier is the source of a commodity component/ingredient with a large variety of sources, the supplier is probably way less critical. It is obviously ennoying to have to change suppliers if one goes bankrupt, but an alternative source can be found reasonably easily, while in the first scenario this may be totally impossible. If you are interested in the subject, in 2005 we wrote a book, called collaborative sourcing, focusing specifically on this subject. You can find details about the book at http://www.i6doc.com/I6Doc/WebObjects/I6Doc5.woa/wa/DocumentDA/doc;jsessionid=58D46440C6097359AC9F0D93AB514F5F.i6doc?wosid=zNUrfefeb5bbb1c1wavrag&d=1007955 if you wish to know more about it. I believe there is another way to look at the importance of suppliers and this is related to the strategic nature of the supplier. Let me give an example. If a supplier produces a component or ingredient that makes your product unique, this supplier is of critical importance for your business, particularly if the product is a flagship product. On the other hand, if the supplier is the source of a commodity component/ingredient with a large variety of sources, the supplier is probably way less critical. It is obviously ennoying to have to change suppliers if one goes bankrupt, but an alternative source can be found reasonably easily, while in the first scenario this may be totally impossible. If you are interested in the subject, in 2005 we wrote a book, called collaborative sourcing, focusing specifically on this subject. You can find details about the book at http://www.i6doc.com/I6Doc/WebObjects/I6Doc5.woa/wa/DocumentDA/doc;jsessionid=58D46440C6097359AC9F0D93AB514F5F.i6doc?wosid=zNUrfefeb5bbb1c1wavrag&d=1007955 if you wish to know more about it.

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