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Substandard parts. Rising costs. Timeliness of delivery. These are just a few of the challenges manufacturers face in their relationships with suppliers. The subject was touched on at Smart Business’ Evolution of Manufacturing Conference last week; I’m using the panelists’ responses as a launching point to offer suggestions on how manufacturers can mitigate some of these challenges.

Relationships are fundamental. There’s no substitute for solid relationships with suppliers. The effort you invest into your relationships will save you time, aggravation, and money in the long run. What characterizes a strong relationship?

• Flexibility and win/win behaviors.
• Transparency, trust, and clear expectations are necessary, as well.

With well-grounded relationships you can avoid (or at least significantly lessen) receiving low quality items that need to be returned and replaced; you can facilitate clean handoffs; assure the end user receives the final product on time every time; order the amount you actually need, rather than over-ordering to protect against quality issues; and avoid rechecking invoices to determine correctness.

Apply the golden rule. While you may not be able to treat your suppliers exactly as you would your own business, the more effort you invest in bringing key suppliers up to your standards the better for everyone. Conference panelist Nancy Gipson of Pringles told the audience that they’ve worked with suppliers to introduce them to the practices and behaviors they use internally at Pringles.

It makes sense: if your supplier isn’t producing to the level you want or expect, it’s an indication of weaknesses in their internal operating systems and behavioral standards. If you take the time to work with them and have them learn from your own best practices, it’s a win/win for everyone involved. They’ll become more dependable as they stabilize their work culture and processes; consequently they’ll be better able to serve their customers, including you.

 

The Experiment:

Try some of these techniques to enhance your relationship with suppliers.  Think outside the box.

• Visit your suppliers and take your people with you. The best way to understand their operation is to experience it firsthand.  Prepare for the visit by working with your people to draft a few questions they can ask the supplier about things that interest them.  Also, prepare the supplier for the visit by suggesting a few areas and processes you would like to see in action.

• Invite suppliers and their people into your operations to see how you use their products.  Prepare a brief introduction of your work processes and where their product fits in to it.  Schedule time for a peer to peer sharing of opportunities for improvement of the relationships and hand-offs.

• Create formalized joint teams for problem solving and improving handoffs, products, and services.  Schedule monthly meetings for the team and rotate locations to host the teams.

• Create a partnering plan for how you can best serve each other in sharing knowledge, skills, expertise, experience, etc.  Include a process for strategic leader sharing, engineering/ design group sharing, assembly/ floor sharing, etc.

• Consider partnering with suppliers for training classes, volume purchasing power, local services, succession development, special projects, etc. 

 

Some questions to consider:

• What can you do to help close the gap with your suppliers’ handoffs to you?

• How can you suggest partnering with your suppliers to create win/win outcomes?

• What are the incentives for you and for them to invest in building this relationship?

• What can you do to demonstrate to them your commitment to transparency, teamwork, and trust?

 

Experiment with these ideas and let us know how it goes.