So, what is the best way to be the most competitive in the market? Should you shop your vendors and make them compete to get the last penny out of your cost? Or, should you stay loyal to your vendors to the end?
By now I think that anyone having read just a few of my posts understands that my goal is to make sure that the entire supply chain from raw materials to consumer (and beyond) needs to work together to deliver the best, most efficient, value add experience possible. I believe it is imperative to compete in the world today, to be committed and to work with companies that are committed to being efficient and providing value through the entire supply chain.
So, with this goal in mind, what is the best strategy to accomplish the most efficient supply chain? I do not advocate either of the solutions above. I have seen many companies that will jump from one vendor to another for a fraction of a cent. If a company is dealing with commodities, maybe this makes sense, but more often than not, I see this strategy cost more in poor service, late deliveries, and hidden costs than it saves.
Conversely, sticking with a vendor, regardless of performance, is not a good plan. Just like any relationship, it takes work to get the most out of it for both sides. If your vendors are not giving you what you need, then you need to consider making a change. While this can be difficult, sometimes it is necessary and beneficial for both parties.
What I do advocate, is long term relationships that work and that are worked on. The best way to build the most efficient supply chain from end to end is to work together with partners and champion (See: Be The Champion) everyone continuously improving their operations so that you can deliver the most competitive product to your customers.
Open and honest communication and striving for common goals builds the best relationships, business and personal.
Check out more of my posts at http://scientificbusinessmanagement.com/blog
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Best regards, Shane.