14
MiMfg Magazine
March 2020
3. Establish agreements to incentivize suppliers
and customers by sharing the economic benefits
of cost savings if feasible.
4. Recognize that the cost of raw materials can
fluctuate dramatically and avoid disputes with
surcharge adjustments into your agreements.
“For small and mid-sized manufacturers, a
valuable practice to follow is to coordinate both with
customers and suppliers at the outset of a relationship
to set expectations. These expectations should not
only consider quality, but issues such as sustainability
that can also affect decision-making throughout the
supply chain,” suggested Hoeg. “At Nexteer, we have
a robust supplier portal containing the latest news,
documents and information required for supplier
partners to ensure consistency and understanding of
requirements. This type of clear communication is
crucial for both suppliers and customers as they work to
develop long-standing and meaningful relationships.”
Remember, navigating supply chain relations can
be the difference between successful, long-lasting
partnerships and short-lived collaborations you end
up regretting and that hinder future projects. Don’t
turn partnerships adversarial if you don’t have to.
You’re all working toward the same results and,
often, improving a process at one point in the supply
chain can lead to winning results all along the chain.
“You can draft the best contracts and create the
best technological environments in the world but, at
the end of the day, human relationships drive the
business reality,” Kochenderfer observed. “The absence
of trust between individuals creates a substantial
portion of the disputes I encounter. Strong working
relationships and open communication lines can often
overcome technological problems in the supply chain
if all parties are working toward equitable solutions.”
Getting Greater SCM Results
Manufacturers can improve their SCM by
implementing internal improvements to existing
processes. For example:
• Stay Agile: Today’s supply chain requires fast
reactions in real-time. The more agile your
business is, the better you’ll respond to market
changes, overcome unexpected shocks along the
supply chain and deliver more reliable sourcing,
manufacturing and transportation.
• Innovate the Right Way: Every manufacturer
can innovate but, when you rely on others along
a supply chain, your innovations need to be done
the right way and at the right cost. Changes
without collaboration can result in huge gains or
huge catastrophes. By discussing your most
innovative ideas, you’ll be more likely to achieve
strong results.
• Be on the Forefront of Technology: The right tech
can do so much for your bottom line. Enterprise
resource planning (ERP) software is a business
management software that many businesses use
to integrate everything along their supply chain
from product planning and development to
manufacturing and marketing. Consider utilizing
a modern ERP system to improve critical qualities
like automatic purchasing, standardization,
increased transparency, better data insight and
streamlined accounting.
• Underscore Sustainability at Home: Sustainability
is a top priority for today’s manufacturers and
their customers. Your operations can achieve
sustainability goals through shared data analysis,
compliance audits and implementing best
practices. The more you prioritize it, the more
your supply chain partners will, too.
For small and mid-sized manufacturers, a
valuable practice to follow is to coordinate
both with customers and suppliers at the
outset of a relationship to set expectations.
These expectations should not only
consider quality, but issues such as
sustainability that can also affect decision-
making throughout the supply chain.
— Dennis Hoeg, Nexteer
• Be Reliable: Success in manufacturing requires
attention to the tiniest details, so reliability is
important. Work on continuous improvement,
greater team management and better operational
strategies to ensure your partners can count on
you to accomplish your part of the process in the
time required.
• Mitigate Risk by Asking the Right Questions:
Many companies have single-source suppliers
that operate under the “just-in-time” method,
resulting in a heavy reliance on risk management.
Ask yourself what would happen to your
production if your supplier stopped shipments
tomorrow. Could you find an alternative supplier
in time? Would you need the approval of your
customer to use that supplier? How much
inventory do you have on-hand to manage the
Get More!
Read additional insights from Nexteer’s
Dennis Hoeg in this months Industry
Member Spotlight on page 22.