The key to success is for your entire Supply Chain to be able to compete in the market. Being a winner in the business game can, therefore, require that you “BE THE CHAMPION …”
In the wake of the Super Bowl victory by the Denver Broncos, I wanted to discuss being The Champion. In this instance, I am not discussing a sporting event but, of course, the supply chain. To be competitive in today’s markets, it requires having an efficient supply chain from beginning to end. It may not be sufficient to just worry about your few links in the chain. This is where being The Champion comes into play.
I advocate to some businesses that they vertically integrate, thus controlling more of the supply chain, with the goal of reducing total cost to the customer. This is not feasible for most businesses, though, for a variety of reasons. Nevertheless, it is possible to help manage more of the supply chain than you own. By being an “expert” in your vendors operations, you can usually benefit your cost structure by helping them improve theirs. Even if you are not an expert in their operations, finding someone that can act on your behalf and review your suppliers operations can easily offset any costs involved.
Many industries have understood this principle for many years now. The automotive industry employs countless Industrial Engineers and efficiency experts. The vast majority of these experts no longer work in the factories of their employers. These manufacturers have come to understand that for them to compete in this highly competitive industry, their entire supply chain must be as efficient as possible. Much of the efforts to improve processes and reduce cost is being done in the tier 1, tier 2, and even tier 3 suppliers.
In this day and age, it is no longer sufficient to focus on making sure you run the best operation you can. The competitive world we now occupy requires that you work with suppliers that are, also, focused on having the most efficient and lowest cost operations. In order to ensure this, you need to BE THE CHAMPION of your supply chain.
Best regards, Shane.