End-to-End Supplier Relationship Management

It takes a Supply Chain to design, engineer, make, deliver, sell, support, service and continuously improve products and services. It only makes sense to have the supply chain be able to closely and digitally work with your organization in an end-to-end fashion.

The presentation below provides our perspective on Supplier Relationship Management and the ways you can effectively support and improve supplier relationship.

 

 

End-to-End Supplier Relationship Management Stages

  • Need for a New Supplier
  • Supplier Evaluation, Selection and Contracts
  • Product/Service Development Collaboration
  • Supplier Development
  • Operational Collaboration
    • Supplier Assessment
    • Supplier Development
  • Ending the Relationship

All Purchasing is Not Equal

There are many ways to categorize purchasing and organize supplier relationships. One such categorization is give below.

Strategic

  • Right supplier is key to program/company success
  • High Value
  • Complex Specifications
  • Quality and timeliness are essential
  • Cross-functional collaboration needed

Non-Strategic

  • Not essential for program/company success
  • Specifications are not complex
  • Supplier selection is simpler

Routine

  • Low value and standard goods
  • Specified good and agreed price
  • Streamline ordering and payment procedure
  • Use of E-Commerce

Fictitious Example – Apple Supplier Relationship Strategy

 

Different Supplier Relationship Strategies for Different Types of Suppliers

Strategic

  1. Analysis of Product / Company Strategy and Supply Chain Need
  2. Supplier Research
  3. Supplier Evaluation and Selection
  4. Memorandum of Understanding (MoU)
  5. Product/Service Development Collaboration
  6. Supplier Development
  7. Operational Collaboration
    • Supplier Assessment
    • Supplier Development

Non-strategic

  1. Supplier Research
  2. Supplier Evaluation and Selection
  3. Contracts
  4. Product/Service Development Collaboration
  5. Operational Collaboration
    • Supplier Assessment
    • Supplier Development

Non-strategic

  • Supplier Selection
  • E-Commerce/Procure-to-Pay

 

When a New Supplier is Usually Needed

The need for new supplier(s) can arise for any number of reasons. The most common reasons are the following

  • New product/service development
  • Expanding into new markets
  • Selecting alternate suppliers
  • Poor performance by current suppliers
  • Ending a contract with existing supplier
  • Outsourcing internal activity

 

Evaluating and Selecting Suppliers

Evaluating and selecting suppliers requires a multi-faceted analysis and often varies based on the need. The facets include

  • Product Technology
  • Process Technology
  • Cost
  • Quality
  • Service Level
  • Joint R&D Capability
  • Company

Working with Suppliers on a day-to-day basis

Depending on the type of supplier relationship the day-to-day collaboration with suppliers can include one, more or all of the following

  • Order Placement
  • Collaborative Product/Service Development
  • Collaborative Forecasting
  • Purchase / Manufacturing Order Collaboration
  • Supplier Quality Engineering
  • Supplier Assessment  / Supplier Development

 

Supplier Performance Assessment

Supplier Performance Assessment like evaluation is a multi-faceted analysis that can incorporate different aspects of the relationship and importance.

 

Supplier Development

Supplier Development is a business strategy that is the basis for an integrated supply chain. Many leading companies support Supplier Development by dedicating significant time, money and resources. Below are some case studies that highlight the extent to which industry leaders go to support Supplier Development.