Quick Tips on Integrated Supply Success
While the concept of integrated supply can reap substantial benefits for both customers and suppliers, it must be set up properly to achieve the best results. Drew Curtis, C.P.I.M., who has had twenty years of experience in purchasing, offers some recommendations.
"First, you have to gain top management support for the concept," says Curtis, director of strategic programs for TTI, Inc (Ft. Worth, Texas), the world's largest distributor of specialty passive resistors, capacitors, and connectors.
Second, make sure all of the other stakeholders in your organization understand what you are trying to achieve with integrated supply. "These include Materials, Materials Planning, Production Control, Finance, Receiving, and Quality," he says. "They need to know what integrated supply is, how it works, and how their responsibilities will change once it is implemented."
Next, identify and begin to work with the best suppliers. "Qualify your suppliers to make sure you're dealing with the best," he emphasizes. "Identify those who are best in class for their specific commodity areas."
In negotiating with suppliers, focus on least total cost, not on lowest purchase price. "A lot of purchasing people say they understand the difference, but many of them still gravitate toward lowest purchase price anyway," he cautions. Next, bring your suppliers in to meet with your internal stakeholders. In this meeting, go over the details of the program, and again explain to the stakeholders how their responsibilities and jobs will change.
"A lot of purchasing people provide scheduling information to suppliers that is not as good as it could be."
Create a balance of responsibilities between your organizations and the suppliers' organizations. "While it is important to treat suppliers as extensions of your own facility, don't expect suppliers to take over full responsibility for the program," he emphasizes. Next, be sure that your internal processes, systems, and information are as good as they can be -- work toward being seamless. "For example, a lot of purchasing people provide scheduling information to suppliers that is not as good as it could be, " notes Curtis. "You need to pay careful attention to this information. While scheduling information will change, you still have to do the best you can from the start." Finally, as the integrated supply program takes shape, identify non value-added steps. "Then, find ways to eliminate them.”
