Having recently spent two high intensity days at a customer’s supply chain conference in Holland, I was reflecting on the flight home about the different ways that our customers approach supply chain management. At one end of the spectrum are customers who treat their supply chain at arm’s length. Hardly keeping them informed or involved, and engage almost entirely at a transactional level. Their ultimate objective, to extract the most concessions at the cheapest price from the supply chain. At the other end of the spectrum are customers who truly value their supply chains as experts in their own fields, and openly encourage them to engage as partners.
Having invested two days, together with our Head of Operations to fly to Holland to attend a supply chain conference, it’s refreshing to see best practice supply chain management in practice, and to be active participants. In a supply category as important as industrial or controlled/certified computers, our products and solutions form a critical part of the value chain.
Clearly communicating the key strategic objectives to the supply chain ensures that these stakeholders understand what is required of them and why. Procurement excellence is one of aligning the right suppliers, with the highest quality, at the best cost with the greatest agility. This is something that needs to be worked on and proactively managed to deliver successful business outcomes.
Companies who are self-aware of their value offering to their customers, generally understand their customers very well and help them to shape their future. They understand that the success equation equals creating value outcomes for their customers at the lowest possible cost. Every business, whatever sector or geography faces cost pressures. But by engaging the supply chain, lifecycle costs and risks can be minimised by ensuring that the greatest value and expertise is added at the appropriate level of the Bill of Materials. These companies are constantly reviewing their value chain and challenge their BOM asking themselves “Where does it make best value & sense to make this?”.
In sectors where solutions are complex these require constant innovation. Engaging the supply chain enables a significantly greater pool of creativity and innovation to be harnessed. Such “Open Innovation” practices have been widely proven as maximising R&D competitiveness and velocity.
Where companies are seeking positions of leadership in their chosen market sector, they need to constantly work with their supply chain to make sure they are working with the best, not the second best. Mediocre suppliers can barely achieve survival, definitely not leadership. In a changing world, the best or the most successful are those companies most able to constantly challenge themselves and continuously adapt to improve, innovate and reduce costs. This requires a combination of simplification and speed. Agility requires companies to be fast, but not in such a hurried way so that quality is compromised.
It is always both a pleasure and a privilege to work with customers who believe and apply best practice supply chain management. It engages, challenges and drives improvement and innovation. This is a business engagement model that we most enjoy working with and brings the best out of Captec.