I had an interesting conversation with a colleague the other day. He told me about a customer that was having problems with their suppliers and about the good advice he gave the customer.
He described the situation they had with two different parts suppliers (i.e. 1 & 2). They each had similar processes and were on time with their shipments 75% and 40% of the time respectively. We all know the impact that late deliveries by your suppliers can have on your entire supply chain. Your customer wants perfect orders and shipments every time and if you can't deliver, you face the consequences of an unhappy customer and potential lost revenue. So, what can you do to improve supplier performance and your order fulfillment process?
Here are a few suggestions that he brought up:
1 - Set up a strategic planning meeting with your supplier organization’s management/representatives to determine objectives, processes and measurement procedures right from the start (or at the beginning of a new year/contract period). This can help to develop a collaborative environment that will facilitate future communications.
2 - Clearly define required delivery dates based on documented standing lead times provided by the supplier. Review the lead times often and be aware of a change in any condition that affects the timing. Using this technique removes the need of the supplier to acknowledge/confirm every single purchase order and can help reduce unnecessary paperwork.
3 - It should be the responsibility of the supplier to alert the buyer immediately if there has been a late shipment, so that they can take action to prevent production downtime.
4 - Hold monthly/quarterly performance review meetings to make sure you are aligned and to ensure that there are no surprises on the horizon. Use this time to share your problems, but also try to learn about your supplier’s challenges as well.