Supplier Relationships - How do I Work With Suppliers to Control Demand?
26 May 2020
Supply chains are currently out of balance, with shipping containers in the wrong place and warehouses filling up because their outputs have reduced due to lower customer demand. Others have ceased production altogether, leaving large shortages of critical goods.
Now is the golden time for supplier and stakeholder relationships. The companies that are responding well during this crisis seem to be those that are best able to leverage strong relationships of trust, visibility and transparency.
For buyers, being able to quickly and confidently share financial, order forecast and risk information with suppliers offers a significant advantage. Those suppliers who have stopped or slowed down their production will need reassurances on demand levels in order to ramp up their manufacturing locations. Where possible, buyers should work with others in their sector, in some cases competitors, to provide a more holistic demand viewpoint on common products – for instance, on commodity items such as bricks or plasterboard in the construction sector.
Manufacturers should also be working to identify which parts currently purchased from a third-party supplier might be better developed internally.
Many manufacturers are working quickly to qualify new suppliers around the world and source the parts they need at the lowest price. But with additive manufacturing (3D printing), for example, new opportunities exist for many types of components where manufacturers may no longer need to source those parts from distant suppliers. Instead, they can simply search the availability of materials and then begin the process of building those parts in-house.
Not only will they reduce the time and money it once took to purchase and transport parts, they will greatly speed time to market, which is crucial in these unprecedented times.
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