Supplier Partnerships

Form partnerships with your suppliers

• Provide long-term visibility of your level-loaded production schedule
• Commit to a long-term partnership
• Once you have your own act together (usually in a few years), offer your Kaizen Team to teach your supplier's people how to achieve the best-of-class results that you have field-tested and proven within your company
  • Offer your team for free, by agreeing upon a way to split the savings with them. A common arrangement is 1/3 for the supplier, 1/3 for you, and 1/3 passed on to your mutual end customers.
• Establish target costs, and target returns on investment.
• Work together with cross-company teams to continually improve the process, including Value Stream mapping. As soon as target costs and profits are met - set new objectives.
• Open your books to your closest supply chain partners, and insist that they open theirs to you.
  • Why is this important? So that every member of the supply chain can work together to understand and improve the entire Value Stream. And so that each member can assure that every member earns a fair return for their contributions to the Value Stream.
  • If this suggestion comes as a shock to you, just relax. You have several years before even your first supplier partnership will evolve to the point that you would consider opening your books to them. And by then, you will have built enough trust and will have learned enough about the benefits of supply chain partnerships to "take your first tentative steps into trusting partnerships".
• Be a good partner. Would you want to "get married" to a partner that jerked you around for years? Or even "just once"?

Don't

• Ask your suppliers to do what you haven't been able to do yourself
• Shift your excess inventories onto your suppliers by demanding that they provide "just in time" inventories before they have instituted lean manufacturing capabilities (because all they will do is build big batches and then deliver in small quantities - which actually DECREASES total supply chain efficiency)
• Try to over-automate your supply chain relationships before you have even formed secure and trusted partnerships.
• Rush the process. Trust takes time to build.

Tip: Your License Agreement allows you to use your Systems2win templates to create process improvement documents that can be shared with your customers and suppliers - as long as the documents are delivered in a non-editable format, such as printed paper, an image file, or a PDF file.