Harnessing the power of your suppliers

摘要: Companies that effectively involve suppliers in their internal product development achieve a new strategic advantage MANY BUSINESSES HAVE RECOGNIZED the importance of optimizing supply management processes. as diverse Toyota, Honda, Ford, Harley-Davidson, Detroit Diesel, Black & Decker, Yamazaki Mazak, Motorola, Bose, and Xerox are developing effective ways for functions to work together with design, development, manufacture, distribution. Such improvements have enabled some slash times by much 40 percent, increase inventory turns from six over 50 year, reduce cost purchased materials between 15 35 percent. At other end spectrum, companies failed recognize processes paying price performance premiums. Often, such unintentionally set up conflicting objectives engineering, manufacturing, purchasing form barriers good management. Engineering emphasizes meeting or exceeding technical targets products, but sees secondary. Manufacturing typically wants maintain constant utilization levels production facilities, using absorb fluctuations, whereas prefers keep suppliers' stable so they can minimize changeover costs pass savings on company. Even at charge reducing materials, limit its ability deliver savings. In survey noted leaders management, we found best practice sourcing requires three major elements process be optimized: * Product development/specification Sourcing Contract execution. By mastering these elements, achieved both dramatic productivity substantial A designer manufacturer mechanical equipment sales excess $5 billion reduced operating $280 million year through improved electronics firm approximately $10 slashed $500 $1 billion. Each element overlaps interacts others. specification, leading select before designing become an integral part team. provide assemblies rather than piece parts, complexity managing vast supplier base multiple parts. To make this work, need help develop advanced capabilities. They must encourage invest technology, should prepared last resort take when existing ones not able pace developments. The next element, sourcing, is way which suppliers, determine number will with, define type contractual agreements exist. Best suggests great efforts avoid duplication capabilities themselves. Where there emphasis single-sourcing strong relationship developed, founded multi-year contracts ownership life. Contracts tend simple, based trust has been built years. instance, recently moved simple one-page having, effect, no all. This was possible because company developed partnership past eight years each party knows what expects longer formalized agreements. …