Dive Brief:
- Market Intelligence company SpendEdge states that streamlining supply chains requires a careful choice of partners to enhance collaboration, CSCMP's Supply Chain Quartely reported.
- Though finding the right partners can be challenging, setting goals in the following areas can speed the process: collaborating in areas of shared stability or success, as well as defining the terms and extent of the collaboration, such as what the collaboration will consist of, the time period that it will cover, and how it will be executed.
- Further communicating what partners want to achieve, sharing growth plans and strategies, or creating profit-sharing agreements may also help ensure that both partners benefit equally.
Dive Insight:
Degrees of supplier collaboration could mark the difference between an efficient or poorly executed supply chain. The quality and timeliness of supplies is key to a product's final integrity. Improving this process inevitably requires a strong commitment from supply chain partners to do the same.
Yet, companies can often forget to work with or reward suppliers for their role in securing business growth. A recurring quality mishap can cost millions in recalls, etc., but consistent on-time performance helps mitigate the risk of production halts. Just as insurance costs go down over time and with good performance, a supplier should be rewarded for proven quality.
Such rewards need not necessarily be financial, however. As the SpendEdge report found, communication can go a long way. If a supplier senses that they are important to your business, they are more likely to prioritize your order over another's in the case of disruption. Similarly, ensuring payments for supplies are consistently made on-time are an often forgotten end of the bargain, but communicating a supplier's importance to the accounting department can make a difference (and even avoid further disruption).
Procurement professionals know supply chains are a relationship business, and it takes both sides to build a good relationship.
