The Golden Rule of Manufacturing

Supplier Relationship Management – 

Do unto your suppliers as you would

have them do unto you

Supplier relationship management (SRM) is the specialized practice of strategically planning for and managing relationships with suppliers to maximize the value of that relationship.

When reading about SRM the focus tends to be on workflow, software and “strategy” while the most important part, the relationship, is not being discussed often enough.  A relationship, according to Merriam-Webster, is the way in which two or more people or groups of people talk to, behave toward, and deal with each other.  This relationship buyers are seeking to strategize is simply an interaction between real live people that can’t always be measured numerically.

It has been said that a business can only be as good as are the suppliers with whom it works.  Therefore building a good supplier relationship is almost as important as building a good relationship with your customers.  Treating suppliers well produces intangible benefits that can lead to a tangible return.

Scheduling Preferences – A healthy buyer-supplier dynamic leads to preferential treatment when it comes to competitiveness boosters such as advance ordering, stocking arrangements, and production scheduling.  Having a preferred customer status increases the responsiveness of your supply chain which in turn improves the availability of products to your customers.

Supply Chain Stability – Investing time to understand how suppliers produce your parts gives you the ability to foresee and prepare for anything that may effect the lifecycle of your components.  By communicating effectively and regularly with suppliers, buyers ensure that cost, quality and timeliness of products are all being managed.  Higher quality increases customer satisfaction and decreases returns, which adds cash to your bottom line.

Input to Innovation – When your suppliers have bought-in to your success they want nothing more than to see you grow and  grow with you.  When considering a new design or prototype, using a trusted supplier who has experience not only in your industry, but also with your company’s products, saves time in the product development process and gets your new product to market.  Positive long term relationships can lead to your best suppliers improving manufacturing processes and technology that help your company develop competitive advantages and cost savings to beat your rivals.

Financial Considerations – Open lines of communication elicit trust that can lead to more flexible terms such as early payment discounts or extended payment options when additional cash flow could benefit your business. Establishing and maintaining a good payment history means your suppliers will be more likely to reciprocate when and if you need it.

There are many ways to promote a healthy relationship between buyer and supplier.  Pay on time or if something unexpected happens, call your suppliers and talk to them. Get to know them with an occasional phone call or visit to their site.  Help your suppliers help you by giving them adequate lead times, drawings and target pricing.  And keep your suppliers informed about changes in your business including sales volume forecasts, new products and staff changes to make sure they are prepared for the changes in your needs.

In order to truly reap the benefits of supplier relationship management, buyers must establish clear communication paths, mutual understanding and respect between both parties.

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Small Business Saturday

Don’t forget, this Saturday, November 30th is Small Business Saturday.  If you are not familiar, Small Business Saturday is a national shopping holiday that is held on the Saturday after Thanksgiving.  It’s a day to celebrate and support small businesses that help create jobs, boost the economy and preserve neighborhoods around the country.

American Express, who first conceived and promoted the holiday, offers its cardholders incentives to shop at small, local businesses.  Participating small businesses also have access to perks such as $100 Twitter advertising credits, free signage from FedEx Office and $50 in Foursquare advertising credit.  American Express estimated consumers spent about $5.5 billion at local stores last year on Small Business Saturday.

Don’t forget to tweet about your experiences at local businesses with hashtag #SmallBusinessSaturday or #shopsmall to help promote you favorite small retailers.

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Machine Shop Virtual Tour – 360° of Machining

At Advance CNC Machining, we are all about trying the latest technology to offer our clients the best service possible.  Our latest digital pursuit is an all new Google virtual tour, an extension of Google Map’s street view technology that lets you “walk” around inside of local businesses right from your computer, tablet or smartphone.

If you aren’t familiar with Google Maps Street View, it provides stitched, panoramic views of many streets throughout the world.  You can virtually walk up and down a street and turn 360 degrees to view your surroundings. You can even explore world landmarks, discover natural wonders, and step inside locations such as museums, arenas, restaurants and small businesses with 360-degree images.

Chances are that we are one of the first machine shops to publish a Google 360 tour.  We did it because our clients are busy and don’t get to make it out to our facility very often.  With our virtual tour you can walk through the front door, see our comfortable lobby & reception areas, walk past our offices and finally walk out into the machine shop areas.

You can view our Google 360 Tour below (no safety glasses needed).  Use the arrows to walk back and forth, turn, look up or down and don’t forget to go in inspection!


VIEW LARGER MAP

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Reshoring – A New Manufacturing Renaissance

What do Walmart, Apple, and GE all have in common?  They are all large companies promising to bring manufacturing jobs back to the U.S.

According to a recent survey done by the Boston Consulting Group, 54% of US based manufacturing executives at companies with sales over $1 billion are planning to bring production back to the US from China or are actively considering it.  This number is compared to 37% last year when surveyed.

Many offshoring manufacturers have been motivated to make these changes by some common issues.  Intellectual property concerns, transportation costs and risks, long supply chain lead time, minimal access to skilled labor and lack of quality control have all been cited as reasons for reshoring to the U.S.  In addition to these factors, wages in China have been going up steadily (71% increase) in the last 4 years while US wages have remained about the same during the same time period.

Experts are forecasting a new manufacturing renaissance by 2015 as conditions in other countries grow more unfavorable and the economic landscape in the US becomes more conducive to American businesses.

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