New rules for global trade and changing market dynamics may soon force many U.S.-based companies to start looking for new suppliers that are closer to home. But this is easier said than done.
Switching suppliers can have a big impact on your supply chain, so it’s important to manage these sourcing projects well. Assessing the supply chain maturity of each potential supplier is an important part of that process. But how can you objectively measure “supply chain maturity” and what do you do if the supplier that you really want (or need) to work with isn’t quite up to par?
The past 30 years have seen a remarkable change in the way manufacturing is done. The development and deployment of new technologies – from communications, to computing, to standardized and automated material handling – have made it cost effective for companies to buy, make, and deliver products all over the world. And the resulting development of supply chain management as a discipline has allowed us to leverage these complex networks in ways that maximize the value for our customers and our shareholders.
Building, managing, and maintaining an effective supply chain starts with education and training. Your suppliers need to understand the interconnections – and interdependencies – between logistics, procurement, and operations in their own organizations. There are lots of ways for manufacturing companies to learn the basics of supply chain management, including university courses, industry certifications, and courses on Lynda.com. But this knowledge can’t be isolated to just a few people or departments… supply chain management needs to be embedded into the corporate culture.
Once people understand what supply chain management is, then they need to establish the processes, technologies, and metrics to support it properly. From Sales and Operations Planning, to Transportation Management Systems, to Inventory Planning. In other words, in order to put their knowledge into action, people need to have – and use – the right tools, in the right ways.
But here’s the tough part for the procurement professionals who will need to be evaluating new suppliers – how can you streamline the process of deciding whether a supplier is really positioned to manage their supply chain well? And, if there are gaps you need them to close, where can you send them for help?
One U.S. non-profit association has come up with an innovative solution to this important problem. The Diverse Manufacturing Supply Chain Alliance (DMSCA) was founded to help disadvantaged businesses “up their game” and plug in to world-class supply chains. DMSCA provides training to suppliers, and then certifies them as they put their learning into action and reach increasing levels of maturity.
Several large manufacturers sponsor DMSCA collaboratively (Caterpillar, Siemens, McCormick, and many more), which helps to ensure that even small suppliers have access to quality supply chain management training and metrics at a reasonable cost. In return for their sponsorship, these large manufacturers get access to a pool of higher quality small suppliers at a fraction of what it would cost for them to do it on their own. Everyone wins!
Finding new suppliers might seem simple, but it’s a risky business. On one hand, a supplier that doesn’t manage their own supply chain well can break yours. On the other hand, developing a supplier to ensure they can provide the quality and reliability that you really need may require an investment in training, processes, and technology. So if reshoring is in your future, make sure that you are asking the right questions, and be prepared to invest in supplier development as a part of the process.