How to work with Supplier to Manage Inventory – supply chain | lean | tactics
How to work with Supplier to Manage Inventory
Companies no longer compete against companies. Supply chains compete against supply chains. But what does this mean exactly?
Your supply chain is made up of your company and all the other companies you partner with to deliver products and services to your customers. Those other companies include suppliers of materials and parts to your factory, retailers who sell your products to consumers, and trucking companies that move your goods through the system. Because you are so dependent upon these partners for your success, it’s the capabilities of the entire team, your supply chain, that make you competitive.
Companies like Unilever, Cisco, and Intel maintain the world’s top supply chains year after year. Continuously strengthening their position in the marketplace, especially in today’s global business environment, with key partners and customers all around the world, supply chains compete against supply chains. Because of this, it is not enough for your company to be lean. Your key partners must also be lean.
It is not enough for you to manage lean inventory. Your key partners must also manage their inventory with lean practices. The burden is on you to make that happen. It’s your supply chain, so you must lead the team in the lean direction.
Toyota serves as a great example of this. They partner with their key suppliers for success. If a supplier runs into a problem, Toyota does not hesitate to send a team of engineers to help find a solution. When a supplier’s making a new product for them, Toyota sends a training team to assist with the production startup. And of course, lean practices are being continuously taught and transferred with these visits.
Motorola is another example of supplier training. In every key training course at Motorola, 20% of the seats were reserved for suppliers, so as Motorola educated their mid-level managers on new techniques, they also educated the mid-level managers of their key supplier companies on those same techniques. As they informed their executives of new strategies and programs, the also informed their suppliers’ executives.
That’s the kind of approach you need to get the most benefit from managing lean inventory. You and your key supply chain partners should work together to learn and practice the lean tools and tactics for inventory control. Because an excellent supply chain treats inventory as one continuous flow of materials, parts, and products through the entire network. So in a sense, you should be managing supplier inventories as your own. To help you do this, your suppliers should also be lean.
Ask if your company has a supplier development program. Most major corporations do, and it’s usually managed by the purchasing department. But if you work for a small or mid-sized company, developing suppliers might be done more informally. Perhaps it’s time to introduce lean inventory practices to your supplier management program through formal or informal training courses. After all, everyone wants to do a better job of managing inventory.