The answer is NO. Supplier relationships today are very different than they were 10 years ago.-

• Suppliers are global
• A supplier may produce your entire product
• A supplier may also be your customer since you sell them proprietary parts for your products
• Suppliers often ship directly to your customers. You never see the product
• You may use a traditional buy sell process with purchase orders and acknowledgments
• You may use a pull system where your supplier ships to your replenishment signals
• You may share forecasts and ask your supplier to provide forecast commitments
• The information sharing may be hourly, daily or weekly
• You may want notes from your supplier or reason codes for non conformance
• You may want to track their work in process so that you can monitor yields and quality issues
• With such a distributed environment you are creating more opportunities for communication gaps when responsive communication is more important than ever to contain costs and maintain customer loyalty

You may have multiple ways of conducting business with your suppliers. It is not just your processes that are varied. Suppliers are different too. They have different levels of sophistication. They have different tools. Your business represents a different level of priority with every supplier.

One thing is certain. Not all suppliers are equal.

Suppliers can be categorized on the basis of the level of information sharing and collaboration required.

1. All suppliers benefit from information. For example, a scheduled transmission of forecasted requirements.
2. Allow some suppliers to edit data directly in your system. You may choose to edit in an offline copy that is reviewed before you execute. The point is you can capture purchase order commitments, comments and also request that your supplier review leadtimes, pricing, and order backlogs for accuracy.
3. A small percentage of suppliers can send you information such as forecast commits, or WIP, or On hand data electronically where your system is automatically updated. Make sure that your system is tapping you on the shoulder when there is a problem with the information. By problem I mean, as an example, that their commitments are less than their last update and don’t meet your requirements.

The more you empower your suppliers with information and give them the flexibility to manage their processes to meet your requirements (forecast or inventory targets), the stronger your partnership will be and there will be fewer surprises.

Traditional systems dictate your processes. While it is beneficial to understand what best in class processes are, you and your suppliers are the owners of the process. Start thinking out of the box.

TrackBack • Digg This • Add to del.icio.us
Tags: Collaboration, Supply management
Posted in Supply chain collaboration, Supply chain management
You can leave a response, or trackback from your own site.