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Archive for the ‘Supply Chain’ Category

Supply chain collaboration
– are you ready for the uncomfortable truth?

Tuesday, July 25th, 2023

 

It has long been recognized that effective supplier relationships are based on collaboration not confrontation. Japanese manufacturing techniques and Lean thinking brought the practice of Partnership Sourcing to the West in the 1980s when most supplier relationships were then adversarial. However in many industry sectors these old behaviours still hang around….

In many ways a successful relationship with each supplier is like a marriage:

  • You want the best for each other.
  • You need openness, honesty and straight-talking to hear and understand
    your partner.
  • You are willing to address any problems to keep the marriage mutually beneficial.

How many businesses are ready for this type of openness with their suppliers? Ready to hear uncomfortable truths about their business practices and their people? Open to accept rather than reject such information? Committed to taking action to address problems identified by suppliers?

Procurement and Supply Chain managers need have a strategic outlook and be strong enough to bring feedback and criticism from suppliers into the business and not feel threatened by it. They must not consider such a ‘public appraisal’ as a sign of poor management of their functions. They must not fear that the board might consider new management is needed in these functions given the problems revealed. Instead they must embrace the feedback and see it as providing opportunities for improvement.

As shown in the table, driving performance improvement through effective and sustained collaboration with suppliers can only be enabled when the Supply Chain/Procurement Leadership has a strategic focus on the inbound supply chain. They will thus accept the need for free and honest dialogue with suppliers (including sharing uncomfortable truths) as a key part of the improvement journey. The business culture also needs to be progressive enough to encourage and fund such collaboration. Digital tools can help businesses build on this solid foundation to enable effective collaborative improvement.

In marketing our new zuppli digital service, that uses two-way assessment to drive supply chain performance improvement, we have seen these challenges first hand. zuppli provides each supplier with a quarterly assessment of their performance against key metrics such as delivery, quality and transactional cost and shows each supplier how they compare in these metrics with other suppliers (anonymously). This information catalyses supplier improvement and helps them focus their improvement activities. Companies like this functionality. This helps amplify the resources and efforts of their internal Procurement/Supply Chain resources.

But zuppli also provides companies with an assessment of the company’s performance in the previous quarter – made by their suppliers – against key metrics such as demand planning, order management and ease of doing business. It also captures and shares supplier critique and improvement suggestions (anonymously to encourage straight-talking by suppliers).

Such feedback is key to supply chain improvement as the company’s people, processes and systems define the environment that suppliers to operate in. That environment can help or hinder supplier performance. For example, late deliveries by suppliers may well be due to many short lead-time orders placed by the company – rather than poor-performing suppliers…. An effective supply chain requires good performance at BOTH ends of the chain.

So just like a marriage, a healthy relationship is needed to ensure a couple stays together in a mutually beneficial relationship. And that includes open and honest communication. It includes the ability to give and receive the truth ̶ often uncomfortable at times  ̶  and to take action. Unfortunately too many businesses lack the supportive culture and a strategic focus in the supply chain to recognize the need and the value of really listening to their suppliers, hear uncomfortable truths, capture their improvement ideas and then take action to address root cause problems. The impact of Covid and the war in Ukraine have reduced many Procurement/Supply Chain functions’ ability to take strategic initiatives; instead driving a tactical focus on availability and price. This has pushed supplier collaboration further down their agenda.

Companies need to see their suppliers as more than simply supplying parts, materials and services. They need to see them as also supplying information and ideas. To consider them as external collaborators with capabilities to help drive innovation within the shared supply chain  ̶  for the mutual benefit of the company, its suppliers and ultimately its customers.

 

Thanks to Frits Thomsen, Director SCAT3 and Dave Carter, Codexx Associates, for their ideas and comments on this article.

For more information visit www.zuppli.com

 

New papers on supplier performance improvement

Monday, July 19th, 2021

If you’re interested in supplier performance and how to improve it, take a look at the new whitepapers we’ve added on the zuppli.com website, available to download.

Driving supplier performance improvement

Thursday, November 26th, 2020

Our latest whitepaper discusses effective approaches for driving supplier performance improvement and looks at how improving performance transparency in the inbound supply chain can help.

Your can read the paper here:

How do you enable high performing suppliers – CODEXX WHITEPAPER

zuppli supplier performance improvement – new video

Monday, September 28th, 2020

We have just released an updated video of our new zuppli cloud service for helping businesses drive improved supplier performance. zuppli utilises a unique ‘two-way’ assessment to encourage collaborative improvement between businesses and their suppliers. zuppli is focused on product-based businesses such as manufacturers, distributors and MRO (maintenance and repair operations.

Currently zuppli is available for demonstration and our initial service is expected to be launched in November. For more information contact Alastair Ross

You can view the video on our Youtube channel here.

Maintenance – Cinderella shall go to the ball

Wednesday, March 24th, 2010

In many (most?) manufacturing businesses,Maintenance is very much a ‘Cinderella’ function – it works away in the back-room of the business and never gets to go to the Ball unlike other more glamorous business functions.  Maintenance is not somewhere that ambitious young managers typically seek a career in as it is often seen as something of a ‘backwater’ in the business. Maintaining and repairing equipment is not something seen as difficult or even that important to the business. The image of the spanner, the hammer and the oily rag are what many people envisage when the subject of maintenance comes up. Maintenance is somewhere out of sight where grubby stuff goes on that senior managers don’t spend much time thinking about.

But hang on a moment. Aren’t most factories these days filled with machines? Aren’t these machines expensive and complex devices like CNC machine tools, laser and water-jet cutters, presses and robots? And with Lean being a dominant way of working in most factories, isn’t equipment availability critical to achieving on-time delivery and high OEE? And isn’t RONA (Return On Net Assets) a key financial metric for any review of a company’s effective use of key assets such as production equipment?

Well, yes, indeed.

So what’s wrong with this picture? It’s simple: The view of maintenance as a non-critical function is out of date and a serious impediment to factories achieving high performance manufacturing. Maintenance must be brought into the 21st Century, along with management thinking. A key result of this old thinking on maintenance is the return on production equipment being lower than what would be possible with high equipment availability and also impacts on on-time delivery performance. Simply put, low equipment availability results in poor delivery performance and unnecessary purchasing of new equipment to provide additional capacity.

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Codexx purchases supply chain solutions from Supply Chain Analytics

Thursday, February 15th, 2007

Codexx announced the purchase of the supply chain strategy and assessment solutions business from Supply Chain Analytics Ltd. This includes the SCAN supply chain assessment solution. Alastair Ross, Director of Codexx, said: “This is a valuable addition to our existing range of best practice strategy and assessment tools and allows us to further extend our existing services in innovation and supply chain management.”

New assessment solution for supply chain management

Monday, November 13th, 2006

To help Codexx industrial clients assess their supply chain operations and strategies against best practices, as part of an improvement programme, Codexx has made available the SCAN supply chain assessment, developed with its partner Supply Chain Analytics Ltd in conjunction with British Standards Institute and Nottingham University. SCAN enables a detailed assessment against key supply chain best practices.

Codexx agrees partnership with Supply Chain Analytics Ltd

Wednesday, November 19th, 2003

Codexx Associates Ltd and Supply Chain Analytics Ltd signed a collaborative agreement in the area of supply chain optimisation. This will provide for Codexx to market and sell Supply Chain Analytics offerings. Supply Chain Analytics provides technologies and methods to help companies optimise their supply chains. Their core offering is the Zemeter supply chain optimisation suite.

For more information go to Supply Chain Analytics website

Energizing Change

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