Why would you spend time improving your suppliers' skills and competencies? It's all about supply chain resilience. Plus, if you mature the process to a level where you can call on their external expertise, it also accelerates innovation and sets you up for long term success.
Here are some Lean tips to elevate your supplier relationships from transactional to strategic. Follow this three-pronged approach to development of capabilities:
- Continuous improvement
- Capability development
- Innovation partner
Each step is more involved than the previous one. Moving through these steps gradually builds trust and confidence in each other.
1. Continuous Improvement
It's inevitable that you'll experience a quality issue with your supplier, and it's critical you take a collaborative approach to resolving it. Otherwise it's a quick road to frustration, friction and a sour relationship.
I prefer to share the incident exactly as it was reported by the frontline. It provides context and builds empathy from the supplier. Using a digital platform improves visibility and accountability and leads to about a 3x faster resolution in my experience. However, avoid anything that locks down data to individuals or departments.
Moving beyond reactive to proactive continuous improvement, look to suppliers to assist with strategic goals. Take an example goal of eliminating waste. If employees are unwrapping individual items from a box, a discussion with the supplier may identify that this packaging is excessive and unnecessary.
2. Capability Development
Capability development is a natural evolution from Continuous Improvement. For example, Toyota and Bluescope Steel used Toyota's concepts of Standard Work and Kaizen to investigate quality issues. This gave Toyota confidence in Bluescope's findings and led to faster resolution of investigations.
3. Innovation
Your procurement team found the right supplier through their due diligence efforts, then you developed their capability. By now you have built up mutual trust and respect, and it's time to leverage all this for new product development. Bring the Supplier into the R&D conversation early and manage their tasks using A3 reports.
That's it – Supplier Development in 3 steps. How can you afford not to do it?
TeamAssurance is Operational Excellence Management Software. If you're interested in Supplier development, better collaboration and faster issue resolution, get in touch.
