SUPPLIER ACCOUNTABILITY, CAPABILITY and RESPONSIVENESS

Aren’t these quite the “buzz words” today….besides being a mouthful of words….what can it mean?

 In today’s lighting fast world of instantaneous data exchange and expectations, there are a few common sense ways to get a handle on the above subject and encourage your supplier to participate – you both may win with big dividends if you can do the following steps successfully.

1.       What do you need and when – seems simple enough, right? 

2.       Does your supplier understand your expectations, have you talked about it?

3.       Ask the supplier – can they, would they, does it cost more or less?

4.       Is your strategy aligned with your planning needs (finished goods and materials), purchasing and inventory control?

5.       Feedback – do you give and receive feedback regularly and share with other organizations (and in an open and honest fashion – what could bemore scary than telling your client they are killing your production schedule)?

6.       Educate others in your company on materials – receivers, warehouse, quality, planning, purchases, leadership

7.       Create an action plan to close the gaps on both you and your suppliers needs

Let’s explore these concepts in some detail:

1.        Sounds so simple – what do you need?  My experience is every group has a different answer and rarely do they all get together to discuss the concept…

a.       Finished goods wants everything and anything to satisfy the customer order, no matter what the pain or cost

                                                               i.      What is an acceptable forecast variation or lead time from your supplier’s perspective

                                                             ii.      What is your customer fill rate expectations – does your safety stock program allow for the space to satisfy the variation of needs

1.       What % of variation is right 1.3; 1.5 or do you expect the supplier to meet any variation

2.       Do you know what your standard deviation is, do you know highest and lowest and why

                                                            iii.      What can you afford – yes there are different prices for different services (like a USPS letter versus Fed Ex)

                                                           iv.      What is the inventory goal – can it accommodate the above?

2.        Does the supplier understand your internal restrictions?

a.       Space constraint

b.      Unloading times (Monday-Friday only 8-4)

c.       Goals – inventory reduction/cost savings/responsiveness goals

d.      E-Commerce goals – going to ERP orders versus email or portal

e.      What happens if their materials don’t arrive on time or as specified

3.       Does your supplier know?  Shocking concept, I know, but I’ve so many of these “ah-ha” moments with a supplier

a.       Do you meet with your top group of important suppliers – spend, complexity, importance to your product – and YES – New to service your company

b.      Does the supplier have the right input from their home office – manufacturing, customer service, transportation to agree to your needs

c.       Are there price differences for the type of service you require (short lead time, expedited services, emergency production)

4.        Do you have internal alignment meetings with your own groups that have a vested interest in materials?

a.       Does Purchases understand what kind of responsiveness you need or quality so that they can negotiate it for you?

b.      Do you understand the transportation and warehouse strategy – how much can you bring in when?

c.       Do your material planners understand the “requirements” of the supplier (feedstock or inventory) – do they know when to call and ask versus just drop an order?

d.      Is there an inventory reduction strategy – if so, can it impact customer service on the finished product or manufacturing side?

5.       Feedback – do you regularly give and receive feedback from your top suppliers?  I always tell people, you cannot meet with every supplier, but here is how I would pick:

a.       Large spend or complex supply chain

b.      Relationship or Reliability issues – I always started with the most hated supplier – it will be magical what you find out and how you can quickly become the hero when you work this supply chain.

c.       New to your company – think about starting as a new employee – just learning the terminology… new suppliers experience the same bewilderment – make new suppliers a flawless start up – teach them the right way the first time!

6.       Educate others in your company on materials

a.       Have regular educational sessions or invite planning, purchases and R&D to your meetings to meet and begin to understand supplier structure and potential partners to help solve issues

7.       Create an action plan to close the gaps on both you and your suppliers needs

a.       Document every item that isn’t up to par with every participant

                                                               i.      As you clear these items with actions, your service and satisfaction escalate

b.      Continue these meetings and actions until you get the results you design and want

 

Just start with these steps – where there is smoke and fire – there is money and inventory to be saved!!!

 

Kindra Murphy

Inbound Materials Expert

 https://www.linkedin.com/pub/kindra-murphy/3/b17/42a