Businesses can only set themselves apart from the competition sustainably, by working with the best suppliers.
In the western industrialized world, supplier networks and relationships often grow over time out of necessity. In developing regions, suppliers are just starting to emerge in certain specialized areas. Shorter product lifecycles, fluctuations in volume, and higher requirements for distribution are additional parameters. Successful businesses have to develop their suppliers constantly over time.
The point at which a supplier is dropped is often quite early. Among the signs that action needs to be taken:
- Lack of defined organizational accountability and no separation of procurement and logistics
- Consensus cannot be reached on global level
- Vague supply chain strategy and no end-to-end approach
- Framework contracts and logistics agreements are non-existent or insufficiently sys-tematized
- Communication with suppliers not standardized
- No transparency about degree of logistics maturity of supplier base
- Insufficient competencies, processes, and standards for certifying and rating suppliers
Benefits of supplier management
The typical results of implementing modern supplier management with 4flow consulting include:
- Responsibilities are clearly defined and competence is built up
- Improved supplier quality and better supplier performance
- Higher degree of suppliers' supply chain maturity (by increasing the reliabilty of supply, reducing lead times, improving service levels)
- Creation of flexibility
- Standardized selection, auditing, and approval of suppliers
- Communication processes that are standardized between companies and suppliers
Solutions from 4flow
At 4flow consulting, we design and optimize supplier management processes, IT, and the organization of supplier management and also assist companies with all project steps. In addition to introducing new processes and standards, our implementation support also includes building up skills and training.
The following solution modules are often implemented:
- Introduce shared (often global) responsibility, with a one-face-to-the-supplier approach
- Clearly define responsibilities for purchasing, quality assurance, and logistics
- Create a maturity model and communicate clear objectives
- Revise and negotiate logistics agreements with suppliers
- Establish a monitoring system to rate suppliers
- Create and distribute a tool kit for supplier development
Proven best-practice solutions support the optimization process. As part of the system-based support of supplier management processes, IT requirements are also defined and drawn up.