Well developed supply base

supply base reduction

Well thought out steps for planning a sourcing trip, qualifying potential supply partners onsite, and establishing rapport with supply partners can result in a smooth transition for companies expanding into new growth markets.

Establishing relationships with supply partners takes time, however relationship building can start off on the right foot and be expedited with proper focus and effort.

Many Western firms focus too heavily on the technical tactics of supplier qualification via company overviews and plant audits.

Supply chain

Introduce supply partner candidates to your extended team, designers, and engineers via video calls to further strengthen growing bonds between companies. In our experience, one week of centrally located supplier meetings followed by one week of focused supplier plant audits, with an allotted two days of buffer, optimizes in country time. Planning an international sourcing trip to establish a supply base abroad takes diligent planning and execution to ensure success. Schedule supplier meetings at a central location, if company facilities are unavailable rent office space. Get to know potential supply partners, every culture is different but allow for time to have lunch or dinner with your hosts to get to know them on a personal level where possible. Direct your team to develop suppliers by analyzing the total cost of ownership, identifying and maintaining supplier performance metrics, and growing strategic partnerships through transparent communication. This makes it crucial for procurement executives to advise their teams to think long term and look at the bigger picture of an opportunity. Conclusion Supplier development programs need to be a major focus of organizations who manufacture products and have a supply base because they lead to better overall relationships with suppliers and will improve communication, quality, and timing as a result.

Direct your team to develop suppliers by analyzing the total cost of ownership, identifying and maintaining supplier performance metrics, and growing strategic partnerships through transparent communication. SMS tools today are allowing supply chain professionals to automate the pre-qualification of suppliers ahead of sourcing trips to free up time to focus on establishing better relationships with potential supply partners.

The planning and establishing steps are tailored for the unique international sourcing requirements in various regions. Get to know potential supply partners, every culture is different but allow for time to have lunch or dinner with your hosts to get to know them on a personal level where possible.

The desire to mitigate inbound transportation costs, currency exchange risk, and supply disruption risk results in companies developing localized supply bases. And because this trusted partner, a true supply partner, will understand every facet of your business — pricing and commercial requirements, quality requirements, shipping requirements, etc.

Supply base definition

Establishing relationships with supply partners takes time, however relationship building can start off on the right foot and be expedited with proper focus and effort. Conclusion As with preparing for an endurance race, there are many critical steps a team must execute to effectively and efficiently develop a world class supply base abroad. Rate suppliers based on RFI responses, it is important to develop a scoring system that will allow you and the home office team to communicate supplier ratings and rankings. Schedule supplier meetings at a central location, if company facilities are unavailable rent office space. And because this trusted partner, a true supply partner, will understand every facet of your business — pricing and commercial requirements, quality requirements, shipping requirements, etc. Challenges Accelerating globalization is pushing many companies to establish localized manufacturing operations within end customer markets. Plant audits usually take one day due to travel so it is critical that you plan accordingly to ensure efficient use of in country time. Your organization needs strategic partners, or allies, not suppliers, and certainly not just the suppliers with the lowest up-front costs. Establishing relationships with potential supply partners is the most important goal of a sourcing trip so it is critical to spend as much time as possible on this step. Get to know potential supply partners, every culture is different but allow for time to have lunch or dinner with your hosts to get to know them on a personal level where possible.

Step 3 Establishing rapport with supply partners builds lasting trust A well planned sourcing trip should focus on establishing relationships with your prospective supply partners.

International sourcing in dynamic markets such as Brazil, India, and China can be challenging for procurement teams with limited current spend within these countries. Rate suppliers based on RFI responses, it is important to develop a scoring system that will allow you and the home office team to communicate supplier ratings and rankings.

supply base analysis

Creating a plan and process on day one with your team, along with new team members in the future, will be the key to sustaining a successful supplier development program. Key Considerations for Establishing a Supply Base Abroad Supply base building abroad is the application of the supplier management process within procurement leveraged internationally and tailored to cultural and business norms.

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(PDF) Supplier Rationalization: A Sourcing Model