Industrial Manufacturing

In APQC’s consortium best-practice study, Supplier Relationship Management: Collaboration for Win-Win Competitive Advantage, leading organizations shared their secrets for rationalizing their supply bases to include only the strongest, best-performing, and most collaborative upstream partners and leveraging those partnerships to reduce cost, improve quality, and increase customer satisfaction.

The study focused on:

1.  Designing a supplier relationship methodology to establish value-added upstream partnerships
2.  Establishing a collaborative environment and synchronizing the supply chain
3.  Using processes, tools, and technology as an enabler of a collaborative environment and synchronized supply chain
4.  Measuring the success of the supplier relationship methodology and providing for continuous improvement

Stryker Instruments (Stryker), a division of Stryker Corporation, was one of the best-practice organizations studied in this research project. They hosted a site visit, and completed screening and detailed questionnaires. Stryker manufactures medical equipment, including drills and saws for orthopedic surgery, knee implants, stretchers, and hospital beds. Worldwide, the company is a leader in the orthopedic medical equipment market. Stryker was acknowledged by Fortune Magazine as one of America’s Most Admired Companies in the medical products division in 2005. 

Beginning in the mid-1990s, Stryker Instruments decided to create a plan to build better partnerships with its supply base. The organization realized that it could not get better internally if Stryker’s suppliers could not keep up and/or were not on the same page as the organization. Stryker made the decision to spend time with its suppliers first, get them to where they needed to be, then work on streamlining its internal processes. The organization would then go back to the suppliers and help them streamline their processes so that the partnership would have a strong foundation. The goal was to help the supply chain to be more reactive and responsive to customer demand. 

Stryker’s definition of “partnership,” as shared with APQC at a site visit in July 2006, is a relationship built on trust, communication, and commitment where both sides work at providing a winning formula for long term success for all involved. Stryker developed a philosophy in its supplier relationship management methodology that drove home the partnership, setting expectations on both sides of the supply chain—internally as well as externally. The organization believes that it has to be able to give its suppliers allies within the organization, whether in R&D, purchasing, or planning, to support them to create a true partnership approach. The organization realized that it must promote honesty, and having the right people, communication, and culture are big keys.

To read this entire case study from APQC, please click here.