Collaborative Supplier Relationships – Best Practices

Collaborative Supplier Relationships – Best Practices

Collaboration with business partners can yield significant benefits including increased supply assurance, reduction in latency and lower inventory levels, faster product innovation cycles, increased flexibility to respond to change and increased revenue. While the results can be dramatic, not all attempts to foster collaborative relationships have been successful. The following is a brief checklist of practices that will help improve the success rate and maximize the value of investments in this area for all participants. Focus on people, process and technology – all three are required for success. Segment your suppliers based on measures important to your business and develop targeted strategy & approaches for each, e.g. one size does not fit all. Segment materials based on key attributes such as cost, MTS/MTO/ETO, volume, constrained vs. unconstrained, demand volatility, etc. and develop deployment strategies to accelerate/maximize value. Both parties must derive benefits from the relationship – establish scheme for sharing captured value. All key stakeholders should be involved in the design of the solution – incorporate supplier needs into the solution. Executive support and active participation is critical. Establish metrics & benchmarks for project – track regularly and make results highly visible. Involve actual users in creation of user documentation & on-line help. Relationships change over time as trust develops – start slow and evolve solutions to capture incremental value as relationships mature. Requirements will constantly change – find a solution that is flexible to accommodate change as fast as the business requires. Establish a continuous improvement program – reward significant/break-though contributions. Consider establishing a user group that meets at least annually – this will help keep a focus on...
Supplier Collaboration Requirements

Supplier Collaboration Requirements

Business Is Changing – FAST In today’s fast-moving and highly interdependent global marketplace, companies are increasingly reliant on complex networks of trading partners, suppliers and outsource service providers to succeed. How effective they are at getting their partners to work together as a seamless, high-performing value chain will ultimately determine customer satisfaction, business performance and value. Tomorrow’s leaders will transform their extended supply chain into a highly responsive business network of synchronized partners focused on a common objective of satisfying customers better than anyone else. They will be able to sense change faster, adapt faster, innovate faster and deliver what the market is demanding before their competition has time to react. To accomplish such transformation however, requires new software technology platforms and applications specifically designed to address multi-enterprise business collaboration. Yesterday’s Software Will Not Solve Today’s Problems Software designed to manage operations within an enterprise cannot be extended to solve the collaborative problems across a network of business partners. The truly integrated business network requires a completely different architecture and set of technologies to support real-time event driven visibility, collaboration and business process execution necessary to react quickly and solve multi-partner supply and fulfillment challenges. Today’s Collaboration Software Must support a new competitive paradigm. The future success of a company will be dictated less by individual effort and more by its ability to be a valued participant in a number of successful supply chains. Will have to support a virtual supply chain, with complex multi-partner business processes, that is continually evolving with market demands. Requires new technology with flexible architectures and federated data models to enable multi-tier collaborative business...
21st Century Health Care Value Chain Improvement Opportunities

21st Century Health Care Value Chain Improvement Opportunities

Health Value Chain participants (Medical materials and device manufacturers, traditional and biologic drug producers, their distributors and the healthcare systems that use them), struggle with opaque and inefficient value chains. These can stretch across 5 or more tiers of sub-supplier to OEM thru distributors to the final point of use by a care provider. At the same time, governments (the ultimate payer in most countries) and insurance providers (primarily in the USA) create constant, irresistible downward price pressure on established products. Point of use/sale information is usually blocked (sometimes deliberately) or otherwise inaccessible. In bound supply information is commonly blocked beyond the immediate supplier or distributor’s inventory data because of heterogeneous IT systems. Even within an manufacturer or health care provider, a multiplicity of IT systems and instances inherited through acquisitions result in a ”tower of Babel” syndrome. Conflicting regulatory requirements in every jurisdiction are the norm. Manufacturing firms with US FDA “validated” legacy manufacturing and quality processes are particularly challenged. Changes to improve these inefficient legacy systems can cost tens of millions of dollars each. Finally, these value chains usually require lot, batch and or serial numbers on each unit produced or consumed, and in the US, this requirement will become a universal legal requirement shortly. This situation resembles that of traditional non-health related value chains of the 1980’s, and 90’s, except that enterprise wide IT solutions in health care now can cost over $200mm each, even for merely midsize Healthcare systems or pharma manufacturers. Small and start up medical firms face huge compliance, efficiency and cost hurdles if they try to develop their own customized value chain...
Benefits of Vecco Control Tower in Life Sciences – Part 4

Benefits of Vecco Control Tower in Life Sciences – Part 4

Product Fulfillment Improvement in a Multi-tier Distribution Environment Scenario Name: Collaborative fulfillment improvement Industry Segment: Companies manufacturing make-to-stock products that are distributed though a multi-tier network. Capital intensive industries (with constrained manufacturing capacity) with volatile demand (multiple branding, multiple product sizes/s, seasonal, promoted, products etc.), e.g. Consumer medical devices, nutraceuticals, pharmaceuticals, Consumer take home medical tests. Company Size: Any Example Company in this segment: Johnson & Johnson, Unilever, GNC, Bayer, Omron Medical Devices Department(s): Supply Chain Operations User: Operations Planner, VP – Fulfillment Economic Buyer: VP Supply Chain, VP Operations Technical Buyer: CIO, Senior Management IT A Day in the Life (Before) Scene or Situation: Finished goods are distributed through a network of distribution centers and warehouses. For example, a plant produces product which is then shipped to regional distribution centers and from there to certain local distribution centers owned by third parties. The plant supports local demand as well as downstream demand from the regional distribution centers. The regional distribution centers support local demand as well as demand from the independently owned local distribution centers. The local distribution centers supports purely local demand in certain defined territories. Inventory may have effectivity dates, as for promotionally branded or priced items, or for seasonal products. It may also have expiry dates, requiring disposal or return of expired product. It may have lot numbers and require traceability of ingredients, production facilities and handlers, or even require verification of environmental conditions through the production and distribution processes. The challenge for the operations planner is to place inventory in the network appropriately to deliver a high level of customer service, while at the same...