Supplier Development Initiatives

5 Supplier Development Initiatives to Create Improvement Projects

In order for firms to compete effectively and survive in the global market, they must maintain and build relationships with a capable and competent network of suppliers and extract maximum value through such relationships. To create and maintain such a network and to improve capabilities that are necessary for the buying organization to meet its increasing competitive challenges, the buying firm may engage in Supplier Development Initiatives to improve the performance of supply base both reactively and strategically. But the question is where should those initiatives come from in your Supplier Development Programme?

Supplier Development Initiatives

In my experience Supplier Development Initiatives can be started in 5 Areas as mentioned below. This blog also describes the objective and what key responsibilities for teams (supplier development engineer, procurement, supply chain, engineering etc.) involve in these Supplier Development Initiatives would be. The possible Supplier Development Initiatives are:  

High Risk Component NPD Management

Drive the Development of High Risk Supplier Products and Processes Using Commodity Specialists and an Effective APQP Management Process

Continuous Improvement of Strategic Supply Base

Implement Continuous Improvement Projects (Lean, Process Capability, Six Sigma) with Key Strategic Suppliers to Drive Cost-Out and Supply Base Capability

Materials Management Competency

  • Improve Key Supply Chain Competencies to Achieve Considerable Leverage to Positively Impact the Financial Performance of the Company
  • Allow More Efficient Utilization of Working Wapital
  • Improve our Abilities to Support Customer Requirements

Supplier Risk Management

Reduce Supply Base Risk by the Effective Application of Focused Systemic Improvements and Risk Factor Analysis

Supplier Site Assessment (SSA)

Ongoing Assessment of Key Supplier Site Metrics to Ensure Business Continuity with Buying Firm Requirement and Proactively Identify Potential Risk Factors

 

Let’s discuss the objectives and key responsibilities of Supplier Development Initiatives one by one:

High Risk Component NPD Management

Objective

Management of High Risk Component New Product Development (NPD) Critical Deliverables with Cross-Functional Team Communication, Risk Mitigation, and Escalation

Key Responsibilities

    • Establish Initial Supplier Project Plan
    • Establish Initial High Risk Component Advanced Product Quality Planning (or APQP) Database/Scorecard Project
    • Establish Cross-Functional Team Meetings
    • Establish Distribution List for High Risk Component APQP Scorecard
    • Update and Maintain High Risk APQP Database
    • Drive Risk Mitigation Plans with
    • Approve High Risk Supplier PPAP

Continuous Improvement of Strategic Supply Base

Objective

Develop and Drive Continuous Improvement Projects at Strategic Suppliers to Improve Supply Base Capability and Contribute to Regional Cost-Out Objectives

Key Responsibilities

    • Establish Process to Align CI Activities with SCM Team
    • Focus on Manufacturing Process Approaches
      • Value Stream Mapping
      • Commodity Manufacturing Process Capability Improvement
      • Scrap Reduction
      • Six Sigma Projects
      • Lean Implementation

Materials Management Competency

Objective

Develop and Drive Materials Management solution with suppliers that leverages standard business processes and tools, optimizes supplier organizational capability, minimizes waste in supply chain, improves predictability, and delivers comprehensive value to the buying firm.

Key Responsibilities

      • Planning & Replenishment: Systems & processes to drive material
      • Inventory Management: Inventory forecasting and execution
      • Order entry, order management and order book alignment.
      • Shopfloor: Receiving, Receipt to put-away, Line-cell delivery, Cycle counting
      • Logistics: transportation, warehouse management, trade management
      • Packaging: Returnables, labeling, verification

Supplier Risk Management

Objective

Develop a Cross-Functional Approach to the Managed Systemic Improvement of Chronic Suppliers Impacting buying firm

Key Elements

    • Facilitates Understanding of Key Operational Issues in Supply Base
    • Provides Effective Prioritization of Resources
    • Highly Structured Approach to Systemic Improvement
    • Identify any potential Supply Chain Risk Proactively

 

On-Site Assessment

Objective

Improve a Buying firm’s Ability to Partner with Their Suppliers Through an Effective Understanding of Capabilities, Business Practices, and Risk Factors

Key Updates

    • Deploy Effective Tool for Supplier Site Self-Assessments (SSA)
    • On-Site Assessment for Key Strategic Suppliers as Required by Supplier Develop Engineer or Manager
    • Review and Discussion of On-Site Assessment Risk Factors with Supplier Leadership.
    • Drive Cross-Functional Team Development of Risk Mitigation Plans
    • Audit On-Site Assessment Performed as Self-Assessments
    • Development of an SSA Scorecard to Provide Additional Insight to Supplier Capabilities and Gaps.

Conclusion

Considering finding the time and resource is always difficult to start Supplier Development Projects on a regular basis. However, Continuous Supplier Improvement is a necessary part of modern supply chain requirement for most businesses to stay competitive. The main aim of these Supplier Development Initiatives is to undertake improvements in the performance of first-tier suppliers through proactive Supplier Development. Not all of these Supplier Development Initiatives will be applicable to your business but some will apply and you can start new projects in these work streams.

I’ve shown you five different ways to kick start Supplier Development Projects. Just try one or two for now, and come back for the rest later. Measure your projects times and benefits before and after, and you should see some improvements.

If you have any other unconventional tips that you’d like to share, I’d be really interested to hear them. Just leave me a comment below

Recommended Book

Lean Supplier Development: Establishing Partnerships and True Costs Throughout the Supply Chain

Author: Chris Harris, Rick Harris , Chuck Streeter 

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