Creating and manufacturing products that are constantly improved to enhance the customer experience requires agile supplier relationship management to be successful. This article discusses some tips for running a cost-effective supply chain that keeps up with innovation. Time is of the essence in the agile production environment and is the only thing you can’t make more of, so use it wisely.
1. Time is an Investment
When first starting a new project, spend the time looking for suppliers. Sometimes using time wisely includes using a lot of time. That might seem counter-intuitive, but the goal is to save time down the road on a repeated basis. Do research now so you only have to do it once (and use it over and over again). When you are gathering information, be sure to take the time to keep it all organized. Information that is unorganized is of no use later.
2. Organization is Key
Set up a spreadsheet and track important components such as: location of warehouse, time zone the sales person lives in, minimum orders required, and in-stock availability. Once you have your spreadsheet with consistent information for all suppliers, it’s easy to sort by the particular objective you are focusing on this time. I say “this time” because in the agile production world, your objective often changes.
3. Focus on Details
The more details you have (caveat: in an organized manner) the better. You need more than material names. You need item numbers and sizes and colors and weights, every detail you can get your hands on. Write it down. Are those items in stock, or special order? In addition to knowing all about the materials you are sourcing, get to know your sales person. Keep their contact information close by in order to reach without digging. In agile procurement, time is a commodity. "How quickly can we get that?” is a common question. Build a relationship so the sales person knows what you are looking for and why. They can offer suggestions and lead you to materials that might be new to you. Additionally, establishing a personal relationship with the supplier can save you time if there is a mishap, such as shipping the wrong product.
4. Time is of the Essence
Once you have your details lined up, now it’s time to manage, well, time. Location of the warehouse will affect the time (and cost) it takes for materials to arrive to your production facility. Knowing where your sales person lives is important, especially if you are on separate sides of the country, or separate sides of the world. You may work late, but your sales person might not, so know their location and plan accordingly. Once you order your materials, be sure to get the tracking number so you can watch the progress it makes to production. Tracking numbers can be especially valuable in times of disruptive weather.
5. Agile Purchases
Having access to multiple suppliers for the same product at a glance can save time searching. One supplier might have higher prices with faster lead times, and another vendor might have lower prices but you’ll have to wait longer for the item to arrive. Similarly, some vendors might have lower Minimum Order Quantity (MOQ) that you pay a higher price on, but you won’t have leftover material you don’t need. You need to know your options.
6. Manage Costs
When setting up your details in the beginning, be sure to ask about tiered pricing which can save you significant percentages by simply ordering “a few more”. This isn’t always the case, but it can happen. Ask your supplier to ship via USPS. USPS Priority (2-day) is competitively priced and with their Saturday operation, they offer a distinct advantage over their competition. Combining knowledge of where your materials are warehoused with the 2-day (that includes Saturday) postal shipping can truly cut costs. Repeat this formula and those savings add up.
As our world gets smaller through online connections, and distance is no longer a limiting factor, using agile work solutions will help any company stay lean and on time, while working to offer the best product to their valued customers. What tips does your company use to manage your supplier relationships? How do you stay agile and lean?