Tag Archive: ASCM

The Resilient Supply Chain: Do You Have Vendors or Partners?

December 1st, 2018

Since we did research on “The Squeeze” for a speech on the the squeeze in aerosapce (meaning:  how does the supplier in the middle between the Tier 1 suppliers who supply final assembly parts for an airplane and the powerhouse mills survive, or preferably thrive), we have been thinking a lot about the supplier relationship.  Coincidently, we also heard a lot on this topic at the Association for Supply Chain Management (ASCM/APICS) international conference as it is a hot topic across all industries. There was an almost identical discussion occurring with retail and the consumer goods industry. Last but not least, all of our clients are seeing the relevance of this topic.

What is the “right” answer?  Of course, it depends!
To manage “the squeeze”, one of the keys is to create partnerships with your key suppliers.  The rest can be vendors since they are not core or significant to your success. However, your key suppliers must be partners and collaborators.  For example, one of the best ways to handle the middle position in the aerospace world is to bring your customers and their demand together with your suppliers and their capabilities.  

Here are a few ideas that all depend on being a partner:

  • Collaborate with suppliers on new ideas/design concepts to reduce materials and waste for you AND up your supply chain.
  • Become a partner of your customer and gain access to demand information as it becomes available and help translate that into a benefit for your customer, you and your supplier.
  • Leverage pricing and volume across the supply chain for a win-win-win.

Although these ideas relate to aerospace, the same concept applies with every client.  When I was VP of Operations and Supply Chain for an absorbent products manufacturer, we used these same concepts to find win-win-win solutions in your supply chain.  We partnered with key vendors to redesign materials (that performed better at a lower cost), redesign packaging, reduce waste in our manufacturing process which required teaks and collaboration with both material and equipment suppliers and more.  By following a partnership route instead of the “vendor” negotiation/beat up on price route, we turned our situation around from bad to good.

We found private equity backers who wanted profitable growth.  However, soon after, the market changed and oil and gas prices were continually rising which significantly impacted our material costs (and were unavoidable) while our private equity investors still expected the same profit improvements as before.  Our business was also heavy in transportation cost since the product was bulky which was also an issue with rising oil and gas prices. Thus, we collaborated with customers, material suppliers and freight suppliers for win-win-win solutions. It “worked” and we were able to offset the price increases while growing the business in a profitable and scalable way.

These types of situations are common in today’s business environment.  

Do you view your suppliers as vendors or partners? And who are you hiring to manage these relationships?  Transaction-oriented purchasing folks or strategic relationship procurement resources?

 



Announcing the Association for Supply Chain Management (ASCM)

October 22nd, 2018

At APICS 2018, the global supply chain conference by the leading trade association in end-to-end supply chain, the CEO of APICS announced the new Association for Supply Chain Management (ASCM).

APICS has been leading this field for 60 years focused on end-to-end supply chain management.  Now, they are taking it to the next level as supply chain drives success across the globe.  Listen to the video (click on the logo link below and you’ll gain access to the video.)

 

 

What Happens Next
APICS isn’t going away.  ASCM will continue to provide industry-leading APICS certifications for professionals in the supply chain.  It will be supplemented with an additional focus on corporate transformations and making an impact.

The great news is that this aligns well with ASCM/APICS Inland Empire’s vision to provide value for manufacturers and logistics organizations and related professionals.

If you are in Southern CA, please check us out and join us at our Fall Executive Panel & Networking Symposium on Nov 3rd on “Advancing Innovation and Navigating Global Trends”.  We have a diverse panel including the COO of the National Association of Manufacturers, the Deputy Executive Director, Stakeholder Engagement of the Port of Los Angeles and Healthcare Innovation Leader and Chairman, Department of Surgery of the City of Hope, as well as a well-known Manufacturing/Supply Chain Executive.

What Should We Consider and/or What Impacts Could Arise?
The key takeaway is that the supply chain is growing in importance, relevance and executive power as it relates to business success.  Supply chain professionals and related support systems (including trade associations) must be innovative, resilient and fast to stay ahead of the curve to successfully navigate these waters.  How do you stack up?  Will you be left in the dust?

Clients in multiple industries that are our sweet spot (aerospace, consumer products) are experiencing the “squeeze” (feeling supply chain and cost pressures from both sides in the supply chain).

How can you navigate these waters if you aren’t on top of your game?  Perhaps it’s time to take your game to the next level (or jump a few with radical change)….