Jul
20
The relationship between the supplier and the customer is a really important one that should not be played down. If you can secure good suppliers who will work with you and fulfill your orders on time, with good quality items and at a great price, then your business will certainly prosper. But how can you provide incentives for your suppliers without having to break the bank or be seen as being desperate to retain them?
Well the first way that you can provide an incentive for a supplier is to reward them by coming back to them so that you use them whenever possible.
One of the important aspects of supply in the 21st Century is a relationship that is based on mutual respect and transparency. This involves communication being undertaken and 2 way communication is the order of the day.
So tell your suppliers that you value them and let them know that for as long as they meet your requirements, you will be keen to do business with them.
Some companies use Key Performance Indicators to act as an incentive. These give the supplier an indication of what will be satisfactory to you in terms of performance and so they have an incentive to achieve the levels of service you expect. Payment milestones are often set against these KPI’s
This is very important because you are telling the supplier what you expect. If you do not tell them and then complain afterwards then they can feel as if they are groping around in the dark. So it is always better to be up front with them.
The supplier will also be wise enough to know that if they perform well in terms of the Key Performance Indicators then you will come back to them, so you are providing them with an incentive to do well through giving them indicators that communicate exactly what you are looking for.
Communication is also important because if a supplier feels unappreciated or even feels that you will turn round at any point and sever their contract, they are less likely to work with you and meet your needs. So you need to tell them when you are happy with their service and you need to tell them that you will continue to use them.
You can also take practical steps to provide incentives to your suppliers. One thing that you can do is plan your production planning to avoid a situation where you change a line after production has started. This can result in workers having to work for long periods to recoup the time that they have lost. But if you undertake proper production planning you should be able to stop this from happening (for the most part). You should also make sure that your suppliers are aware that you are doing this and that you are keen to avoid them having any knock on costs.
Make sure that you give all your suppliers clear lead times and stick to those lead times. Do not keep changing lead times and messing your suppliers around; they will appreciate the consideration you are showing for their operational practices.
The above ‘incentives’ do not really carry any financial implications, but you could think about offering some kind of bonus if orders are completed on time etc. The difficulty with these type of bonuses is that if you give a supplier a bonus, they can expect this every time. So then you end up having to pay out every time an order is completed on time. This type of incentive is not always the best way to go and instead the rewards of repeat business, the promise of a long term relationship and a mutually beneficial relationship should act as incentive enough!
Jul
20
How Using RFID Could Help Your Business
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Using RFID, namely radiofrequency identification is a really simple way to increase the activity and efficiency of your business, whilst simultaneously reducing costs. The application of RFID is now proven and can be utilised in many different areas of business; even livestock can now be tagged with RFID!
RFID works by tagging items, products or in fact anything that you want to tag. This can ensure that you keep track of items without having to go through all the work involved in a barcode system and scanning the barcodes. In a sense, RFID is a ‘wireless’ way of scanning barcodes; all you leave out is the scanning. So you can keep a 100% accurate record of your stock levels, without having to physically check items. Thus the process of moving items through the supply chain is a very efficient process which means that the process costs less than if traditional methods were used. Many companies also find that they are able to reduce the amount of stock that they have to retain, simply because they are more in control of the stock.
In turn this scanning also enables companies to have more direct control over all their assets. This includes not only items that are stock items but finished products and goods. Keeping very accurate records of stock, assets and goods ensures that asset management is achieved almost effortlessly and if there is a need to comply with statutory requirements, then this can also be achieved with the minimum of time and effort.
Items can even be tracked from country to country so it is really easy to keep abreast of when stock will arrive. Because cars can also be tagged or tracked it is also easy to check where people are and if they are on the route that they should be on. This can eliminate any wastage in terms of staff taking unauthorised time of work etc.
In addition, the time required to physically check stock levels and then replenish them is substantially reduced by RFID and this means that staff time is saved in terms of stock management, but also that there is less time devoted to planning stock management. This time can then be allocated to other purposes within the business.
Security can be improved utilising RFID, so if there are any items of equipment that need to be kept secure then these can be tagged using RFID. This ensures that in particular small items that may actually be quite valuable can be tracked, so they are less likely to be stolen. This can substantially reduce the incidence of theft. Hence why animals can be tagged, so that if they suddenly ‘disappear’ their whereabouts can be instantly determined, without having to resort to time consuming methods.
Another benefit of RFID is that it is incredibly cheap and although there is a perception that such sophisticated technology must be terribly expensive, this is not in fact the case and the systems can be installed for a very reasonable price.
So although RFID sounds as if it is very much an expensive option for businesses, the reality is that it is very good value for money and will save businesses substantial sums of money within a very short period of time which makes it an incredibly good business investment for a minimal injection of cash.