March 2020
P
roductivity, quality, efficiency and cost-
effectiveness are four critical components
of a successful manufacturer. Without these, a
manufacturer can quickly fall behind, fail to gain
ground and even be forced to shut its doors. Proper
supply chain management (SCM) can help achieve
all four goals. Strong SCM will boost your reputation
and lead to a positive impact on your bottom line,
stronger relationships with suppliers and customers
and new and better products delivered faster and
with higher quality.
“Improvement of supply chain management is
the most universal opportunity I see for growing a
business,” said Adam Kochenderfer, attorney for
Troy-based law firm Wolfson Bolton, which specializes
in supply chain management and other corporate
issues. “Regardless of the industry, nearly every
manufacturer’s margins can diminish if they are
not paying attention to things such as raw material
surcharges, late shipments and financially troubled
suppliers. The good news is that a relatively
standard set of best practices can improve virtually
any manufacturer’s supply chain management and
related costs.”
While each business is unique, all should look at:
1. Where and how they source the raw materials
from their suppliers and how those materials
reach their facility
2. Delivery and logistics of getting the product to
the customer, either the end-use consumer or
manufacturer further down the production line
3. Internal manufacturing processes and how the
areas they control (fully or near-fully) affects
steps earlier or later in the supply chain
While much of SCM relies on improving
technological processes or modernizing equipment
to do things faster, cheaper and with higher quality,
perhaps the biggest and most unheralded priority is
communication and understanding how relationships
affect everything in the supply chain.
“It starts with good relationships. With that as a
strong foundation you can feel comfortable with
making sure you are getting and giving fair pricing
and the whole supply chain becomes part of your
team,” said Jordan Thieme, director of operations for
Amigo Mobility. “This also opens up communication
and empowers the supply chain team to do what
they can to lower costs and expedite processes.”
Relationship-Building:
Along the Supply Chain
Open communication up and down the supply
chain protects your business. The more trust that
exists between business partners, the more effectively
you can react in real time to sudden shifts in quality,
MiMfg Magazine
economic or regulatory hurdles, changes to a
company’s financial health or adjustments to
contracts, pricing and purchasing orders.
[SCM] starts with good relationships.
With that as a strong foundation you
can feel comfortable with making sure
you are getting and giving fair pricing
and the whole supply chain becomes
part of your team.
— Jordan Thieme, Amigo Mobility
“Supply chain partners play a key role in our
ability to produce dependable, safety-critical
products and deliver best-in-class technology,
quality and value to our customers,” said Dennis
Hoeg, vice president of Nexteer, a manufacturer of
innovative intuitive motion control systems, and
president of the company’s North American
division. “We aim to be a partner of choice for
suppliers, and the relationships we have with our
supply chain partners are built on mutual loyalty and
reciprocity. With nearly 1,000 suppliers across our
global supply chain, ensuring this network of
suppliers is effectively managed is vital to our ability
to meet the needs of every customer, every day.”
Consider how your business relates to suppliers
of your raw materials and the customers of the
products you produce.
Relationship Building:
Suppliers and Customers
Manufacturers can and should work with suppliers
of their raw materials or products to maximize
efficiency and reduce costs wherever possible. Too
often, the supplier-client relationship is viewed as
contentious when it is actually symbiotic.
“On new projects, we involve key suppliers at the
very beginning of the strategy and design process,”
said Thieme. “They talk with our Amigo engineers
during the design phase to make sure we are making
the parts cost-effective. Without those conversations,
we may miss how a small change for us could have a
large cost impact to our supplier and hurt the overall
supply chain.”
As for ensuring you “get it right” the first time —
essential to remaining efficient and cost-effective —
follow these four key recommendations:
1. Be as clear as possible about expectations and
required specifications. Too many disputes arise
due to what a supplier “should have known.”
2. Promote open communication channels
to address problems at an early stage.
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