• Current customer base - can you talk to other clients for references , do they work with your ‘ sworn ’ rival , are positive case studies available that you can relate to ?
• Financial standing - it ’ s amazing how often we do rigorous financial checks on customers and yet fail to appreciate the financial credibility of a potential strategic supplier
• Investment - track record and forward plans . How does this investment ( or lack of ) affect the ability to offer you something different or better than you could do yourself ?
• Location – becoming ever more important is the need to be close to the customer . The move towards reshoring has been accelerated by Brexit , Covid-19 and freight & logistics trends built around reducing carbon footprint and environmental impact
• Ownership – how will this drive different behaviours and approaches to investment ?
• Culture – get out of the boardroom and walk around a factory shopfloor . You will learn more in 10 minutes about a business , their people and their levels of engagement than sitting through hourlong polished presentations from the sales team
• Supply chain capabilities – often complex and always critical . Can the potential partner bring new ideas and sub-suppliers into the mix that could positively effect quality and cost ?
• Design and engineering capabilities – do the skills possessed by the partner complement your own ? Are you are looking for something different , whether that is value engineering , design for manufacture , support around design for cost , perhaps specific certifications and approvals ?
Time spent in the rigorous selection of a new strategic supplier is always time well spent and should be so much more than the quality team going in and performing an audit . The costs of getting it wrong can be ‘ eye-watering ’ and , in some circumstances , could stop a business ’ stone dead ’.
Certainly , from a UK contract manufacturing perspective , the outlook is largely positive , but not without its challenges .
You cannot fail to notice that we have lost certain skill sets and capabilities that are not returning to our shores any time soon .
A good example is certain types of casting services , where a combination of legislation and energy prices have resulted in us simply not being competitive and hence a lot of this specialism being off-shored ‘ East ’.
Thankfully this is the minority . We are blessed with some remarkable , innovative and exceptionally competent contract manufacturers that span multiple disciplines . At times they may have been overlooked with the focus purely on the desire to source from low-cost countries , but the mood is changing and companies are seeing the real benefit of working with and investing in each other , developing agile , creative UK-centric supply chains .
This can only benefit us in the longerterm , help drive sustainable GDP growth , rebalance our trade deficit and improve productivity levels that have never recovered from the 2008 recession .
Not for one moment am I suggesting that mass reshoring is the only answer . That would be both one dimensional and naïve - global supply chains are just that , we need partners around the world that are agile and fluid .
So , in summary , the importance surrounding the ‘ make vs buy ’ decision has never been greater than it is currently .
We live in a post pandemic recovery economy that is balancing climate and sustainability pressures with the opportunities associated with digitalisation , Artificial Intelligence ( AI ) and robotics . Then you can throw into the mix , rising political tensions between the East and the West , which is increasing the risks of trade barriers and further nationalisation .
As history demonstrates , businesses that adapt successfully will thrive and prosper . Sadly . companies that don ’ t react , could become the next drive-thru fast food outlet .
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Issue 50 PECM 49