Organizations are making significant advances when it comes to inviting strategic partnerships. The reality that companies can achieve a mutual benefit from aligning goals is unmistakable, and seen by some as a prerequisite for continued success.
Entering into supplier partnerships can be an exciting and purposeful adventure, however the road to enlightenment has some pitfalls that can be hazardous, if you’re not careful.
Branded as just another businessman’s headache, supplier quality management is certainly not for the feint-hearted but like any other discomfort, needs to be controlled.
So how can you maintain quality among suppliers?
The first step is understanding why you should.
Your next focus needs to be directed to optimizing existing quality management systems. This will ensure your suppliers remain an asset to your organization.
Why Is It So Important?
Managing supplier quality should be high on the list of essentials for any organization.
Taking risks in this area is no longer acceptable. A formal supplier contract, Client Service Level Agreement, or the old-fashioned handshake (shudder) no longer offers protection from breaches by the very company who’s initially promises professed strength and commercial advantage.
Improving your organization’s own quality depends greatly on what your suppliers are bringing to the table.
In particular, for retailers, a supplier’s Inferior standards before a product even hits your shelves, is no longer an investment paying dividends.
All Systems Go
The term ‘best practices’ can be overused, but in supplier management, has never been more important.
A supplier must be thought of like every other professional affiliation, and as such will need to be observed with a view to obtaining the best performance.
Measuring quality is never easy, but by intertwining your supplier’s activities with your own can lead to a true partnership.
But where do your start? I’m glad you asked.
Begin with having your supplier’s operational metrics data fed directly into your existing system.
Metrics can be from basic inventory levels, to vision on products processed per month, all the way to disclosing the number of customer complaints received.
With your system as the parent, you now have the ability to monitor any questionable behavior, check on lead times for products, and even staffing problem areas.
In addition, your ability to conduct supplier audits and inforce corrective actions, will become as simple as when you undertake the same for your own organization.
Genius, I know.
Track & Trace
Believe it or not, many organizations do not track the quality of their suppliers.
At all. Ever.
It’s not about finger pointing, but more about protecting your asset. Consider the ramifications for your business if you don’t allow for a certain degree of healthy undercover work.
Without it, the flow on effects can lead to increased freight costs due to factory malfunction, or recalls and warranty expenses due to poor workmanship.
As one example, delays in stock on a supplier’s end can, and will, result in low stock levels on your side.
We all know who that will affect. Yes, your customers.
Complaints will increase and service satisfaction rates will decline immediately. What’s worse is, there’s nothing you can do about it.
Why would you put your reputation in the hands of someone whose quality assurances are not acceptable to you?
Look at it this way. You wouldn’t buy a house without having a good idea of the neighboring surrounds and you certainly wouldn’t send your child to an expensive school without a bit or research on its achievements, and capabilities.
This is your business. It only makes sense that you monitor supplier quality standards, with a view to an issue-free future.
Don’t take risks with your business that will have a definite, undeniable effect on your customers.
If you’re wondering what the big deal is, this is about achieving your organizations objectives.
Your suppliers have made an undertaking either by a formal agreement or through an ongoing relationship, to become a working partner in your business. Enormous amounts of time and money have been expended with a view to success for both parties.
What most people forget is that it takes hard work coupled with due diligence to maintain that success.
Complacency is a dirty word.
Image: Dan Moyle