What Is Supplier Development?

Consensus definitions of Supplier Development are that:

▪ While “closely related to supplier relationship management, it is the process of working with certain suppliers on a one-to-one basis to improve their performance for the benefit of the buying organization” (Chartered Institute of Procurement and Supply)

▪ It is “about generating a new capability or competency in suppliers…often linked to, although distinct from, performance improvement” …. and that “by developing suppliers, organizations can generate competitive advantage… that can manifest itself in a new product for sale, a new streamlined process or the implementation of a new standard.” (Forbes)

Supplier Development Challenges

For certain Supplier Development requires change – both on the part of the Customer and the Supplier. While Suppliers are an enormous – and often untapped – pool for innovation, continuous improvement and cost reduction, Suppliers are often reluctant to commit resources to Customer often fearing that their IP will be abused or that their cost models exposed, leaving the them exposed in future negotiations. In short, Suppliers do not trust Customers. This lack of trust can undermine the success of supplier development programs. (Forbes)

Supplier Development and Supply Chain Excellence

To overcome these challenges, the DMSCA Corporate Mentoring Program (CMP) incorporates communications, training, and assistance in fostering trust between Suppliers and Customers. Supplier performance alignment and adaptation to the Customer unique operational requirements are the essence of Supplier Development and their achievement of Supply Chain Excellence is the organizational cultural shift that provides the glue for assurance their sustained performance and, thus, their Continuous Improvement.

What Performance Improvement Can Suppliers Expect

▪ Delivery Performance Improvement
▪ Reduction in Order Fulfillment Cycle Times
▪ Improvement in Forecast Accuracy
▪ Increase in Overall Productivity
▪ Lower Supply Chain Cost
▪ Improvement Fill Rates

25%-60%
30%-50%
25%-80%
10%-16%
24%-50%
20%-30%

Benefits to Supplier Members:

▪ Communications of mitigated Supply Chain performance risk
▪ Communication of performance differentiation
▪ Direct engagement with the corporate Sourcing and Buying Organization
▪ Communication of metrics that demonstrate Continuous Improvement

Benefits to Corporate Members:

▪ Identifies diverse suppliers with growth potential through Continuous Improvement
▪ Exposes diverse suppliers to Supply Chain survival strategies
▪ Creates top producing Manufacturing, Logistics, and Distribution Suppliers
▪ Allows for Supplier Development with no additional cost to corporation
▪ Supports corporate Supply Chain resilience requirements
▪ Fosters supplier innovation
▪ Fosters Supplier Supply Chain Excellence through performance enhancement

What Suppliers Are Saying:

– “We collected a lot of data, but it was not being used strategically. Once we were introduced to the CMP, we began relying heavily on our data to measure performance. The tools help us improve forecasting and delivery, and they allow us to be more transparent with our customers.” – Ian Blount, PhD, VP, Supply Chain Management, Coalescence
– TBD. Icy Williams, President/CEO, ATMOS360