Analyst Insight: Supplier relationships and the management of them are critical to business. The strength of the relationship is two vs. one, transparency, collaboration and innovation. Real value is extracted when buyers and suppliers work together. Not surprisingly, businesses focused on supplier relationship management (SRM) lead their peers five to one in terms of value derived from their supply base. - Mickey North Rizza, VP of Strategic Services, BravoSolution
Analyst Insight: Today's strategies for managing suppliers are incomplete. Too much emphasis has been placed on using power to gain leverage over suppliers. But this strategy doesn't work in every situation and care has to be taken to architect the right kind of relationship. Power stymies the development of truly collaborative and strategic relationships. These relationships can produce outcomes well beyond what one firm can do by itself. - Karl B. Manrodt, Professor of Logistics and Supply Chain Management, Georgia College & State University
The term "Web 2.0" refers to the current state of online technology as it compares to the early days of the Web, and is characterized by greater user interactivity and collaboration, more pervasive network connectivity and enhanced communication channels.
In the "Benefits of Lean Accounting in a Lean Manufacturing Company," author Dan Anthony discusses the major differences between traditional and lean accounting, starting with a quote from Taiichi Ohno that says "costs do not exist to be calculated; costs exist to be reduced." This really gets to the core of the difference between traditional and lean accounting: traditional accounting focuses primarily on the cost of goods sold, whereas lean accounting focuses on the value stream from customers to suppliers.
A supplier review process at Chick-Fil-A has grown from a simple, manual exercise to a robust collaborative initiative involving numerous internal departments and high-level sit-down meetings with suppliers. Mike Walpole, senior manager of distribution and logistics, explains how the process has evolved and where it is going.
Stage Stores' vision is to have no compliance violations on orders from suppliers and zero chargebacks, says Ken Lettre, vice president of compliance and supplier relations. Barring that, it wants any violation to occur only once. Lettre explains how Stage Stores is working to achieve those goals.
The shift of most U.S. furniture manufacturing to offshore locations has extended lead times by 90 days for furniture retailer Haverty's. John Gross, eastern regional manager, says a policy of "trust but verify" is essential to ensure that suppliers deliver on time.
Analyst Insight: No matter what "expert" you ask – all will point to the fact that SRM is on the rise. This growing realization that buyers and suppliers must work together to achieve success in today's complex and volatile economic climate is a welcome sea change in thinking that only will continue. A key to getting SRM right? Make sure you are putting in mechanisms to manage the business with the supplier – not just to manage the supplier. – Kate Vitasek, Faculty for the University of Tennessee's Center for Graduate Executive Education programs.
Analyst Insight: Richard Branson said, "Succeeding in business is about making connections." Our businesses today have thousands of connections with customers, suppliers, and within our own enterprises. The sheer magnitude of supplier connections can be complex in a global business: thousands of suppliers x hundreds of interactions per supplier x at least one element to be discussed between two of the parties equals many connections we must sort through to get to the heart of our relationships and manage them effectively. – Mickey North Rizza, VP Strategic Services, BravoSolution