How proactive is your supply chain?

By Michael Field, CEO, The Raymond Corporation

If your goal is optimizing lead times, quality, cost and delivery, a proactive supply chain is mandatory. With this approach to supply chain management, you’re better able to find opportunities to remove and shorten steps, as well as identify needs earlier, ultimately leading to more-predictable results and increased margins. Your customers also will benefit because they’ll enjoy a higher-quality end product.

While a proactive approach is common among more-progressive companies—especially those that view the entire organization as a supply chain and continuously look for ways to optimize process flow and remove waste—there is always room for improvement. That’s why we’ve outlined these six opportunities to make your supply chain more proactive:

  1. Treat your suppliers as partners (not vendors). This approach to supplier relationships is critical to a proactive supply chain. Without the in-depth understanding of supplier operations that flows from an open and collaborative partnership, you’d lose out on opportunities to more efficiently and effectively integrate operations. 
  2. Define a clear vision for the partnership. When both partners have a shared vision, your suppliers are more likely to deliver what you expect. That way you can spend more time focused on optimization and less time focused on solving cost, delivery and quality issues.
  3. Identify supplier partners with similar values. It’s much easier to form a common understanding and identify mutually beneficial solutions to challenges when your partners approach business the same way you do. Look for those suppliers who balance cost, quality and delivery similarly to your organization. We’ve found that when each party approaches this balance differently, there’s little hope to move beyond a transactional relationship to a partnership.
  4. Know your supplier partners. Shooting emails and picking up the phone can only go so far. Be sure to take the time to visit supplier partners’ facilities. The deep understanding of their operations that can stem only from being on-site and seeing the processes unfold firsthand is incredibly valuable to your ability to think beyond your own supply chain when looking to optimize or solve for challenges. In the same vein, if you’re not able to understand how your suppliers approach production and what happens at each step during your walk-through, it’s a good indicator that this particular supplier isn’t the optimal partner.
  5. Achieve executive support. Without top executives at both organizations on board with a partnership, it is difficult to maximize the value of the relationship. Scheduling regular senior meetings with both parties is an important way to identify high-level challenges and opportunities and how they impact the relationship and shared processes.
  6. Measure and analyze. You can’t manage what you don’t measure. Tracking key metrics and continually identifying opportunities to optimize will lead to more-predictable results over time. Additionally, diving into the data can allow you to uncover early indicators of future problems, so you can solve them before they manifest.

None of these six opportunities is a simple quick fix; however, they are well worth the effort. A proactive supply chain allows you to focus your time where it’s of most value, and that creates more value for your organization and your customers. Create and support strong supplier partnerships and then reap the rewards.