7 STEPS TO A RESILIENT SUPPLY CHAIN INTEGRATED SUPPLIER MANAGEMENT

Customer demand patterns change rapidly. Regular supply sources experience unforeseen bottlenecks. Planned product launches are canceled and unscheduled product launches are expedited. And then there are global disasters like the COVID-19 pandemic, supply disruptions like chip shortages, trade tariff challenges and more.

When supply interruptions crop up, a manufacturer needs to adapt fast. If the flow of real-time demand and supply data continues after the disruption, adjustments can be quickly communicated up and down the supply chain and your manufacturing business can recover. If information transfer abruptly stops when a link in the supply chain snaps, it leads to poor decision making, lost orders and worse.

It’s critical that supplier performance bends, but doesn’t break.

BEND, DON’T BREAK

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Traditionally a supply chain disconnect occurs when translating customer demand to production requirements, and then further upstream to raw material supply planning. At each stage, the planners must consider existing stock positions, replenishment batch sizes and cycles, inventory policies, lead times and operational constraints. Even a simple supply chain can quickly become unmanageable when unexpected disruptions occur.

Demand data should be fingertip-accessible to your suppliers so they can adjust to every change with you. When the link between customer demand and the corresponding raw material supply activities updates dynamically, you can have end-to-end visibility of supplier management information, sourcing data and collaboration communication.

To protect the resilience of your company’s inbound supply, regularly communicate demand to suppliers.

SHARE EARLY AND OFTEN

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You need a robust, transparent and collaborative digital sourcing process. But how to select the right suppliers for your direct and indirect strategic purchases?

Constant monitoring and supplier evaluation are required to consider all factors, accurately measure performance and feed that data into sourcing decisions.

But the choice of supplier should be based on more than just price. Take a broader look at total cost of ownership to consider the big picture and a supplier’s value over time. Sourcing from the right suppliers -- so that cost efficiency is balanced with responsiveness -- is critical to a resilient supply chain.

Look beyond price to a supplier’s total cost of ownership.

IT’S ABOUT MORE THAN PRICE

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A strategic approach to trade policy and regulatory compliance can also drive competitive advantage. Digital exchange across departments, business units and global trade partners translates into supply chain visibility and an ability to adapt quickly to import trade requirements and take advantage of free trade agreements.

But an international survey showed that 70% of companies do not fully utilize free trade agreements (FTA). And not only large corporations benefit from FTAs -- over 90% of exports to FTA countries come from small to medium-sized companies.

Boosting import compliance and strategically utilizing FTAs, streamline your company’s customs process, reducing bottlenecks and regulatory headaches. Global trade software can also greatly improve visibility and collaboration.

Streamline and automate global trade operations for competitive and cost advantages.

CROSS-BORDER COMPLIANCE

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As Peter Drucker wrote, “What gets measured, gets managed.”

Integrating and managing supplier quality and delivery metrics into sourcing and resourcing processes improves supplier performance.

But it can be more than that. Sharing both short and long-term objectives elevates your relationships with suppliers from vendor to partner. With a partner, you can incorporate strategizing and deliberating before, during and after the transaction, to build a long-term relationship, a knowledge of each other’s working styles, and a regular cadence of communication.

Improve the performance of and the relationships with your suppliers, and merge their expertise, assets and capabilities with yours to create competitive advantage.

Integrate a supplier scorecard to drive continuous improvement.

EXECUTE & MONITOR DELIVERY & QUALITY

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Supply chains tracked by spreadsheets are rapidly becoming digital.

Digital technology enables even greater visibility at each touch point along the supply chain. End-to-end connectivity with suppliers is now essential to an efficient global supply chain. Incorporating artificial intelligence and the Internet of Things, and deploying electronic sensors and tracking capabilities allows for real-time tracking of the movement of all goods throughout every aspect of the manufacturing, transportation and logistics processes.

And analytics grows even more important as prescriptive analytics makes use of machine learning to help business decision making.

Gain greater insight by incorporating digital technologies into your supply chain.

LEVERAGE DIGITAL TECHNOLOGY

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Dictating instructions to suppliers is the first step in creating a viable supply chain. Monitoring and measuring supplier performance and sharing that scorecard regularly with suppliers is one tick better. After that, the next level of supply chain maturity is supplier development.

Supplier development takes the supplier relationship to the next level of efficiency. Supplier development focuses on creating collaborative relationships with suppliers to improve their performance. It involves embracing supplier expertise and aligning it to the buying organization’s business needs, and, where appropriate, vice versa.

Communications, performance, quality and responsiveness are all improved. Vendors understand the full scope of their own businesses, from quality to pricing, and yours, so together you can drive innovation and competitive advantage.

Go beyond supplier management to supplier development.

MEASURE AND SHARE PERFORMANCE FOR SUPPLIER DEVELOPMENT

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Today, suppliers play a greater role than ever in supporting a manufacturer’s ability to meet their customer demands and remain competitive in the marketplace.

According to Deloitte, 79% of organizations with superior supply chain capabilities (“supply chain leaders”) achieve revenue growth that is significantly above average.

7 STEPS TO A RESILIENT SUPPLY CHAIN Integrated Supplier Management

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How resilient is your supply chain?Consider whether your ERP infrastructure can support a more resilient and evolved supply chain. Try our Integrated Supplier Management diagnostic to learn how your organization can enhance supplier relationships to maximize supply chain performance.

“Things move as fast as the least lucky and least competent supplier you know.”

- Elon Musk

7 Steps to a Resilient Supply ChainIt’s critical that supplier performance bends, but doesn’t break.

Regularly communicate demand to suppliers.

Look beyond price to a supplier’s total cost of ownership.

Streamline and automate global trade operations for competitive and cost advantages.

Integrate a supplier scorecard to drive continuous improvement.

Gain greater insight by incorporating digital technologies into your supply chain.

Go beyond supplier management to supplier development.

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