Supplier development can be a daunting task. For many organizations, it is difficult enough to manage your own organization’s performance, let alone your suppliers’. But what if supplier development held the key to unlocking the full power of your procurement program?
Supplier development is rooted in collaboration between buyers and suppliers, and leverages each party’s expertise to improve performance, capabilities and outcomes. Typical buyer-centric supplier development activities could include helping suppliers ramp up production, work through yield, resolve capacity and product/component issues plus find and set up secondary suppliers.
Organizations that excel in supplier development take collaboration much further by tying their own success to that of their suppliers. They prioritize collaboration and include key supplier stakeholders in product planning and roadmap discussions. In collaborative supplier relationships, buyers and suppliers work hand-in-hand to innovate and find new ways to eliminate costs and inefficiencies from the supply chain, ultimately producing rewards for both parties.
The first step to strategic supplier development is identifying what you require and value most from your suppliers. Your needs are most likely different for each supplier and sourcing event, making it important to carefully evaluate all criteria against the intended outcome and objectives.
Buyers and suppliers should be on the same page in terms of the criteria and key performance metrics that are valued most and least. Consider some of the many variables:
- Green initiatives
- Innovative packaging
- New materials
- Improved production
- Efficient shipping
- Enhanced performance
- Better inventory monitoring
- Quicker fulfillment
- Reconfigured design
- New market access
- Due diligence
The list of supplier criteria continues based on your organization requirements. The most crucial part of every supplier program is ensuring that the criteria is clearly understood, communicated, aligned and measured. The most strategic procurement teams take the relationship a step further by creating actionable performance improvement plans for supplier development and encouraging supplier-enabled product innovation.
BravoAdvantage Suppler Value Management plays a key role in enabling many of world’s best-performing procurement teams to find, develop, collaborate with and manage suppliers. At the core of BravoAdvantage is a unique supplier-centric approach that integrates supplier lifetime value throughout the entire strategic procurement process. The approach, which is unmatched in the industry, prioritizes the supplier relationship, and in turn, reaps significant competitive advantages for the buyer. Learn more about BravoAdvantage Supplier Value Management here.