APQC

In APQC’s consortium best-practice study and report, Supplier Relationship Management: Collaboration for Win-Win Competitive Advantage, leading organizations share 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

The second chapter in this report focuses on Collaboration and Synchronization of the Supply Chain. This chapter identifies the key findings related to how the best-practice partners in this study establish a collaborative environment and synchronize the total supply chain to drive a consistent and reliable source of quality materials, while improving cost and supply chain performance, ultimately resulting in improved customer service. It describes how strategic supplier relationships are built through communication and collaboration between the organization and its suppliers to minimize conflict or resistance and develop trust and respect. It examines how organizations establish common goals with suppliers and work together to maximize collective strengths while compensating for weaknesses.

The three key findings in this chapter regarding collaboration and synchronization in the supply chain involve the investment of time and resources in building relationships, building a strategic sourcing framework, and working with suppliers to develop mutual strengths and synergies through continuous relationship management and communications. The research shows that best-practice partner organizations are investing considerably more resources in strategic and collaborative practices than other organizations. Best-practice partner organizations are utilizing 10 percent more resources and 36 percent more operating dollars on defining sourcing strategy, selecting suppliers, and appraising and developing suppliers. Conversely, other companies in the study are utilizing more resources on the day-to-day tactical side of the procurement activities—ordering materials and services.

The findings in this chapter are:

1.      Strategic relationships require time, trust, mutual understanding, regular and consistent communications, and mutual commitment to establish a long-term relationship.
2.      Building an effective supplier relationship framework involves identifying and categorizing spend characteristics and then implementing initiatives across a rationalized supplier base.
3.      Working with suppliers to develop mutual capability and integrated strengths serves to continuously improve supply chain effectiveness and, ultimately, customer service.

To learn more about best practices in Collaboration and Synchronization of the Supply Chain, read this entire chapter  from APQC.