Supplier Development

Supplier Development

Supplier development is the process of working with certain suppliers on a one-to-one basis to improve their performance for the benefit of the buying organization. Supplier development is a business strategy that involves working with suppliers diverse suppliers to boost their performance and drive continued business growth. Through education, mentoring, and access to resources, suppliers help drive more sustainable and robust economic opportunities for suppliers own business. Supplier development requires trust and collaboration. These elements encourage companies to foster long-term relationships with their suppliers, helping them gain the economic and business resources they need for continued growth and success.

Advantages of Supplier Development:

  • Full transparency between organization and supplier
  • Improved collaboration between organization and supplier
  • Streamlined and reduced sourcing activities and lead times
  • Improved quality, manufacturability, and reliability for new designs
  • Increased supplier responsiveness
  • Increased customer satisfaction
  • Increased awareness of supplier diversity
  • Increased visibility of full supply base to procurement, quality, and even management departments

Process of supplier development:

Supplier selection

Choosing suppliers is crucial to business. And categorizing suppliers supply base is also vital to making the most of available resources when managing those suppliers. Suppliers would ideally want all to be performing at a high level. However, companies may have large supplier lists stretching into the thousands with some naturally more critical to quality than others. Selection should be the first priority for active supplier development management. Importers and purchasers often consider various criteria for evaluating potential suppliers when beginning their search, such as:

Developing an approved suppliers list

We often find that a company’s supply base invariably expands over time. Indeed, taking advantage of the “risk management” option of a “second source supply” is a very prudent business strategy. Every business should make use of their approved supplier list and measure the performance of each with regard to cost, quality and delivery at a minimum. As mentioned above, listing suppliers by category will make this a more efficient and value-added initiative.

A categorized list becomes a powerful tool for managing suppliers and making the most of resources to get the best added value from supply chain. The list will help to plan the most efficient audit schedules that will have the greatest impact on the performance of suppliers and, therefore, own business.

Auditing suppliers

As with most audits, supplier audits represent a snapshot in time. Lots of information can be collected by this method, and it is indeed a mandatory requirement for most quality management systems (QMS). Suppliers are also limited in the scope of information suppliers can gather from a simple, questionnaire-type audit. An on-site supplier audit is typically the best way to get more in-depth and reliable information.

On-site supplier audits

On-site auditing would, of course, provide suppliers all of the information from a questionnaire-based audit and much more.  One way is to audit supplier informally while suppliers visiting their facility. Suppliers can get a lot of valuable insight just from having a look around the production area, warehouse and other grounds. We will be able to proactively manage supplier audits and factory visits in the most efficient way by analyzing the information in the approved supplier list and key performance indicators (KPIs) data, such as “right first time”, “delivery on time” and others.

Supplier management

Once the development stage has matured to an acceptable level, it’s time to tailor on-going management to the needs of each supplier. Tracking ongoing supplier performance is key to understanding each supplier’s needs and any required corrective actions. For example, suppliers may experience disruptions in shipments due to seasonal fluctuations in production capacity of a particular supplier. Tracking on-time delivery over time can help suppliers take appropriate actions to avoid subsequent disruptions at that facility. Historical quality reporting can similarly help suppliers find and address any recurring product issues that occur at certain facilities. This transparency lends to better supplier management strategies.

And through effectively managing existing suppliers, suppliers can make informed choices regarding the retention, removal or further development of each supplier to suit the needs and requirements of business. Invest the time in suppliers, maintain good lines of communication, speak to the right people and avoid confusion. Suppliers are an essential key to success. And the ones suppliers choose to work with can either make or break suppliers.

Get started to work with Reva Phoenix:

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