6 Steps to Manufacturing Supplier Development
While potentially leading to and as distinguished from business development, the Chartered Institute of Procurement and Supply defines supplier development as “the process of working with suppliers on a one-to-one basis to improve their performance for the benefit of the buying organization. While not the same as supplier diversity, it is what makes the supplier diversity function more sustainable as large corporations’ supply chains not only mature in terms of expected levels of performance but also digitization.
DMSCA is an organization that provides direct development support to select mature and maturing manufacturing suppliers towards operational excellence, sustainable performance, and business development within the context of strategic sourcing model. There are six steps to manufacturing supplier development that are integral to our five phase education, training and certification system called the Corporate Mentoring Program (CMP).
These six development steps are:
1. Performance Benchmarking:
DMSCA supplier training leverages suppliers’ engagement with PriceWaterhouseCooper (PwC), of the Chain Operations Reference (SCOR)* model and an adaptation of the Capability Maturity Integration (CMI) model to generate organizational supplier performance benchmarking written reports that respectively identify (1) supply chain performance (reliability, responsiveness, agility cost, asset management) and (2) operational maturity (quality systems, manufacturing processes, financial management, etc.) performance gaps and opportunities for improvement. A supplier digitization assessment is being added in CY20.
2. Strategy Development and Performance Improvement:
Since “one size does not fit all,” DMSCA’s training enables suppliers to appropriately configure supply chains (make-to-stock, make-to-order, engineer-to-order), organize operational data, and develop unique supply chain, cross-enterprise operational maturity, and sustainability strategies to guide specific performance improvements and customer alignment. DMSCA also advocates that suppliers develop a technology enablement and a talent acquisition/workforce training strategy.
3. Standard Metric Development and Performance Certification:
Called Standard Metrics, suppliers maintain unique supply chain performance and cross-enterprise maturity metrics as they are improved and progressively attain supply chain performance certification at three levels of maturity through which to communicate mitigated performance risk.
4. Strategic Improvement Plan Development and Case Studies:
Suppliers are guided in the development of (1) an internal strategic improvement plan outline by business process areas (management information systems, modeling and simulation, manufacturing processes and equipment, enterprise management and technology integration, and legal, regulatory and environmental) to guide their short and long-term development and (2) supply chain case studies to demonstrate practical application of Standard Metrics to solve customer problems.
5. Performance and Continuous Improvement Monitoring:
Based on Standard Metrics, DMSCA monitors supplier improvement in such areas as delivery performance, inventory cost reduction, reduction in order fulfillment cycle time, improvement in forecast accuracy, increase in overall productivity, lower supply chain cost, and improved capacity realization.
6. Business Development and Innovation Collaboration:
Within Industry Group Clusters (IGCs), suppliers share their Standard Metrics and collaborate with IGC corporate participants towards business development and innovation co-discovery.