An article in today’s WSJ, “Companies More Prone to Go Vertical,” discussed the current trend for some companies such as Oracle, Pepsi, IBM, General Motors, Boeing and Apple, to cite a few, to return to the practice of vertical integration. Vertical integration can be defined as the degree to which a company owns its upstream suppliers and [...]
Many people struggle with getting senior management support for supplier performance management initiatives. And, according to the editor-in-chief of Supply Chain Digest in his July 2nd editorial, many people don’t even know what senior management support means. Most know that you’re supposed to need it or you might not get very far with implementing [...]
My previous post about why supplier scorecards fail generated a lot of interest. So today I’m going to write about one of the biggest reasons for failed supplier scorecards: There is little or no action or follow through that results from the scorecards. Supply managers get so focused on the idea of having a [...]
The failures at Peanut Corporation of America are tragedy in every way. This supplier failed to meet both regulatory and customer requirements. Its customers failed either to uncover or report the failures, and people died as a result. Now a healthy, everyday product is suspect, and faith in the U.S. food processing industry has [...]
As the saying goes, statistics can be made to prove anything – even the truth.
Or, everything is vague to a degree you do not realize till you have tried to make it precise (Bertrand Russell).
The customer sends the supplier its monthly scorecard. Wait, the calculations seem completely wrong. We did better than [...]
Scorecards have become the Holy Grail of supplier performance management. I find that most companies have some kind of supplier scorecards. And if not, they are in the process of developing them or want to develop them. Expectations for results are high. However, very few firms are satisfied with either their scorecards or the results [...]
Some supply risks can be caused by the customer firm itself and thus provide a real chance of avoidance in the first place.
What? You thought supply risks were all caused by forces beyond the customer firm’s control. Think again. While catastrophic supplier failure and supply continuity disruptions have been noted as supply managers’ biggest [...]
What steps can you take to avoid supply risk? Be methodical and be proactive. Segment the supply base for risk. And look beyond just the obvious categories. First, look at all types of suppliers who have risk potential, depending on your type of business, such as: direct material suppliers, suppliers providing important services, and transportation [...]
The recent article in Purchasing, “Allegheny Technologies Designs a Broad Risk Strategy”, (8/14/2008) is one of the rare glimpses into how some companies are actually dealing with supplier risk. Rather than just talking about risk or not acting on Sarbanes Oxley directives to address supplier risk, some companies are taking action. What I found [...]