MiMfg Magazine March 2020 | Page 13

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. 13