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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 [...] McKinsey recently published the results of its global survey on managing global supply chains. To boil down a seven-page article: they aren’t managing the risk. Or to quote the article: “relatively few respondents…say that their companies are translating the importance they place on these [risk] factors into corporate action.” Are we surprised at this [...] In a rush of enthusiasm about a lean supply chain, some firms expect that their suppliers will embrace lean with equal passion. Passion for lean can be contagious, but getting suppliers to adopt lean requires much more work than lean inoculation or indoctrination. Before rushing off and sending out an announcement that suppliers should [...] When my company was a small supplier to Boeing, I was of course happy to have landed them as a customer. Our relationship was excellent and added value to both parties. Boeing took a chance with my company, an emerging technology business. And the initial bureaucracy that we had to go through to become a supplier [...] Many companies are concerned about suppliers who are larger than they are. How do you get a 500-pound gorilla to cooperate with you? Can you actually use the term “manage” in relation to a big supplier company? Actually, can you ever really manage even small suppliers? Not really. You can try to manage and [...] In an effort to flow lean to suppliers, firms are often internally focused. They are concerned with how suppliers can support their needs and tend not to view the situation from a systems perspective. Often it is about what suppliers need to do to satisfy their customers — which is certainly an essential ingredient. [...] Some of the hidden cost drivers in the supply chain are relatively easy to uncover, measure and address by adopting classic lean approaches. However, many supply chain problems begin and end with the customer-supplier relationship. The extent to which critical issues, wastes and cost drivers can be identified and [...] The wastes that are part of lean thinking are well-documented, waste being defined as anything that doesn’t add value to the customer or that a customer would not be willing to pay for. The classic seven wastes in lean thinking include: unnecessary transport, inventory, wasted motion, waiting, [...] |
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