Keys to Effective Supply Chain Integration

Why do some manufacturers now prefer to buy from Dutch suppliers? It’s due to the fact that sustainable competitive advantage is not practically the most affordable possible purchase rate, about ‘lean co-operation’ throughout the supply chain. Outsourcing to the low-wage countries is ending up being a thing of the past. Faster time-to-market and more versatility to move with demand– that’s now the primary focus.

Which’s not something that can be swiftly copied from others to achieve quick wins. It’s an approach that needs investment in sustainable supply chain co-operation. Well, it sounds like a nice story, but how do you really get successful supply chain integration off the ground?

A clear vision

The dedication, generally from the chain director, that intensive co-operation with suppliers will be based upon trust, duty and value.

Dedication from senior management

A no-brainer, but a lot of MTs enable supply chain integration to be pushed towards the back burner. It needs changes to the way you work with your providers, and demands that your own operation has to be appropriately organized. Take your foot off the gas, and you’ll be taken from all directions by your competitors.

Urgency for modification

Internationally exporting machine manufacturers are frequently the front runners when it concerns supply chain integration. They feel the regular cost pressure from the low wage nations, and dedicate to developing their distinction with higher quality and much shorter lead times.

(Dare to) share transparent information

The obligation at a larger supplier begins with the sharing of information. Sharing a regular products usage forecast enables providers to manage their own production capability better. And incorrect shipments can also be minimized.

‘Distribution of advantage’

The benefits have to be felt by all supply chain partners, not just by the chain director (manufacturer). That implies they’re responsible for sharing information and supplying a transparent overview of supplier efficiency. That then allows for higher delivery reliability throughout the chain as a whole to be rewarded with the quicker payment of invoices.

Start simple

Pick a few big suppliers and the rest will follow. Which 20 % of your providers create 80 % of the purchasing volume? Share material requirements throughout, make them responsible for JIT shipment with VMI and reduce your buffer inventory. Last-minute surprises through unclear order communications cost pots of cash on both sides.

Rise of the cloud

Manufacturers are more and more commonly making use of supply chain software ‘as a service’ in the cloud. They can then easily invite suppliers to deal with them in an online environment where communication over purchase and sales processes can take place quickly, and important data can be efficiently exchanged that currently sits concealed in e-mail inboxes, stand out sheets and closed ERP systems. Chain partners look at a real-time introduction of the process together, enabling them to respond to occasions quicker and shorten preparations.

Talk about these 7 pillars in your company. Understand that sustainable supply chain co-operation is no longer an option. Sooner or later, you’re going to need to get involved.

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