The 6 conditions for the best supplier
There is no doubt that a successful supply chain management requires a high level of supplier cooperation.
For an operating supply chain management, it is very necessary to find suppliers who can contribute to procurement and supply and to cooperate with them at the same time.
When you are selecting a vendor to assist you in supporting your SCM model, there are some key vendor characteristics that must be considered. But unfortunately, we cannot see these qualities through the project in the financial statement or quotation. Therefore, buy-side organizations must look beyond traditional perspectives and prudently select qualified suppliers.
The conditions that these suppliers must meet include:
1. Vision and long-term goals
Successful supply chain management requires all members of the product chain to share a common vision for managing overall costs. If the participating members are not appropriate, that is, the members do not view the supply chain from the perspective of the overall process with the correct strategic vision, the entire supply chain will not work. Suppliers must have a clear understanding of the entire supply chain process, and everyone should try to minimize overall procurement costs.
2. Maintain focus (Focus)
The first step in SCM is to sign a contract and draw up a plan. A successful supply chain management requires the execution of a series of processes in order to be effective. Buyers and suppliers must maintain a certain level of focus on the goals set: such as supply chain management and overall process cost control. All the parts that must be taken care of must also be handled with care, so as not to put them at a disadvantage in a state of being manipulated by the unit-price.
3. Risk sharing
The focus of an SCM also brings some risks. These risks do not arise because the purchaser or the supplier pays special attention to the unit price of the commodity; the risk arises mainly because all participating members attempt to reduce the overall cost of the entire supply chain. This exposes the risks that participating members will encounter. All members must go and share the risk. A supplier that understands the overall goals and will share a common vision of the SCM, still needs to guarantee or guarantee the unit price, as they may sometimes just talk. Sharing some of the risks and exchanging information with each other can really help with a common goal.
4. Reporting capabilities
The ability of suppliers to provide detailed reports is a key factor in the success of SCM. Reliable, accurate and timely reporting will enable buyers to acquire knowledge and information on the supply chain without spending extra time. In principle, suppliers must establish an automated reporting process. To set up a dedicated information search department by itself would waste a lot of time and reduce productivity (or damage relationships with other jobs).
Communication is an essential element in the operation of SCM. Whether it is the purchaser or the supplier, the communication channel must always be kept open. When an SCM is further expanded, especially in the process of process transformation, it is imperative to establish a smooth, timely and honest communication channel. The best way to achieve this level of communication is to establish an extranet of corporate associations — a secure network base that both buyers and suppliers can access. This additional network can be used for information exchange, negotiation, and review of qualifications. However, we have to recognize that, whether it is an additional network or any communication method, it is just a tool. No matter what the communication tool is, maintaining the effectiveness of the communication channel is the most important thing.
6. Attitudes on sharing
Can your SCM supplier sit down and talk honestly with you about cost controls, business elements, and other near-confidential information? A successful SCM relationship requires all involved members to have an understanding of various costs and costs Controlling bets takes considerable mental effort. The information gained by investing effort must be able to be shared openly and honestly. Manage a service. With supplier selection, appropriate vision, focus, resources, and communication styles, plus some of the characteristics your organization needs to maintain, you will be able to manage any type of supply chain with ease , thereby reducing the overall procurement cost and breaking away from the fetters of the previous single unit price.