One of A. T. Kearney’s clients was a branded goods manufacturer
that worked with event organizers to create trade show booths
that reflected their brands, images and positioning, Thill says. The
process was time-consuming and costly. “There was significant
back-and-forth between marketing and the event organizer about
the details in the brief, which added a lot of cost,” he says. “For
example, the first brief given to the supplier didn’t contain crucial
detailed information. The supplier chose the booth it thought best
fit the client’s needs, but it wasn’t what the client wanted.” The two
sides kept going back and forth. “That process was ine;cient, plus it
added costs to the client and the supplier,” he says.
To create more value, the manufacturer changed how it wrote
the briefs, Thill says. It standardized the format and clearly defined
the type of information and level of details and requirements to
be included. That way, a supplier could best understand what was
needed and provide an appropriate solution, he says. “If you design
the process the right way, you can create new value and take out
unnecessary cost in the process, thus lowering total cost while
increasing creativity and access to innovation,” he says.
Sustaining value and innovation with legacy suppliers is challenging.
Most suppliers run lean organizations, and getting them to commit
to collaboration and strategic partnerships can be di;cult.
“Getting people who wear many hats in their operations and are
critical to the day-to-day supply to step away from their day job
and commit some time to this type of a program can be viewed as a
risk,” says Smith. “You can encounter reservations.
“But when you work through it and see the
outcomes, incumbent suppliers realize they
can deliver value to their customer without it
necessarily having to come from their margins
or impacting their margins in a negative way.
They are able to strengthen their relationship by
meeting the customers’ objectives.” They also
build capabilities to deliver this to other customer
relationships, he says.
Broski says that if the supplier has a “spirit of
innovation, a genuine partnership mentality and a
commitment to excellence to secure the lowest
cost, best service and quality — and integrates well
with the customer — success is inevitable.”
Similarly, organizations that devote time and
e;ort into selecting and fostering e;ective supply
relationships with legacy suppliers benefit in ways
that include improved business terms and new
solutions, ideas and opportunities, Broski says.
For today’s supply management organizations,
Bendorf says, sustaining value and innovation
with incumbent suppliers is a matter of survival.
“You will never perform better than your suppliers
perform,” he says. “If you help them perform
better, they will help you perform better.” ISM
Sue Doerfler is a publications coordinator for Inside Supply
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