Jul
11
Supply Chain at the heart of Australian reform
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https://logisticsmagazine.com.au/alc-calls-for-government-focus-on-national-supply-chain-efficiency/ is reporting that, as part of a package of widespread reform, the Australian government is pushing to improve it’s handling of containerised goods as growth is predicted to expand 165% over the next 30 years.
ALC Managing Director Michael Kilgariff states “The development of the National Freight and Supply Chain Strategy should be viewed as the next step of the economic reform agenda and in the same context as the white papers that have transformed many of Australia’s economically critical industries.
Seen as part of a 15 year plan, a push for a national supply chain strategy is seen crucial to this and is targeted to be able to deliver real benefits to the Australian population. Indeed, perhaps the most telling piece in the article is the statistic of how improving the Australian Government Supply chain has a demonstrable net impact on the economy – the statistic quoted is a 1% improvement relates to $2 Billion on the bottom line.
It’s heartwarming to see big Government take Supply chain seriously.
It’s an interesting article – click the link at the top of this piece to go check it out!
May
26
Supplier relationship management requires a look in the mirror
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When it comes to building relationships with your suppliers, sharing requirements and discussing performance is a direct way of underlining your expectations. For many organizations this is often carried out within the boundaries of a supplier workshop or development review. From the viewpoint of the buyer or commodity manager it can be all too tempting to look at the failures and attempt place the blame for performance and failing to meet expectations solely at the feet of the supplier.
However, in reality, most organizations would benefit from and should employ two way dialogue engaging the suppliers to articulate their perspective on what could be done to improve the situation and the important killer question – “what do we as a customer do wrong”.
What to focus on?
When discussing performance and development issues, the areas to focus may vary from company to company but the typical issues that many businesses face involve QCD (Quality, Cost and Delivery) – But if you now look at it from the suppliers perspective – how can you as a customer influence these aspects?
Lets consider the following:
Quality
• Incorrect Drawings
• Poor Engineering/Technical Support from customer
• Unclear specifications or definitions
• Poor customer feedback
Cost
• Buying policies – will only comit to small batches but buys regularly
• Not open to designing out cost
• Inflexible on packing/shipping requirements
• Wont undertake a joint savings initative
• Sees cost down as just an attack on profit
Lead-time
• Inaccurate leadtime data in customer system
• Ineffective buying policies
• Lack of customer innovation (no kanban, VMI etc)
• Wont relax specifications
• Poor PO commitment
Added to these issues is the equally important issue of the relationship that you have with the supplier – What are you like to do business with? For example:
• Are there effective lines of communication?
• Are you open to change and innovation?
• Are you performance driven?
• Is there an effective commercial arrangement?
• Is there open and honest dialogue?
• Are you clear in what you want and how you want it?
Summary
We all want to have an effective supplier base but this does take considerable effort both in terms of the initial sourcing and the management/development of the supplier. The start point is obviously dialogue and a critique of the current situation but if you only look at the supplier in this critique you’ll be missing probably half (if not more) of the problem and to develop a truly effective (and mutually beneficial) relationship any critique should also involve the customer.