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PCB007-May2021

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MAY 2021 I PCB007 MAGAZINE 53 colleague he identifies as David Taylor, for- mer chief of purchasing at Hewlett-Packard, Greeley. Aer being tasked with finding two or more sources for each part number, Taylor's boss read up on JIT and changed tack, looking for "one good supplier for each part number." e solution to this conundrum, Schonberg- er points out, is to maintain a relationship with multiple vendors, but only manufacture some (or just one) of the parts with each vendor. Schonberger uses an example of a car man- ufacturer sourcing le-side light assemblies from one fabricator and right-side light assem- blies from someone else. Yes, both companies would be able to produce all the needed light- ing assemblies. But now, if one supplier suf- fers a shutdown, the other fabricator can step up temporarily. is reduces buying complex- ity by sole sourcing, but also preserves much- needed flexibility in times of supplier crisis. What does Schonberger see as the benefit in this approach? He lists these results on page 156: • A typical supplier will sell much larger volumes to a much smaller number of customers than before • Long term contracts, not short-term purchase orders, become the norm • Suppliers may receive training, advance planning information, and perhaps even financial help • More contracts specifying a regular daily delivery schedule • Buyers at the customer plant make the freight arrangements instead of the supplier We should note that I-Connect007 colum- nist Christine Davis spoke to the challenges of establishing a partnership with a potential cus- tomer stuck in the old way of thinking. [3] e customer/vendor relationship is a mi- crocosm of the larger supply chain. Just as the need is there to create parallel channels for resilience, the working relationship needs to be similarly resilient. In this case, it means building colleague-to-colleague relationships throughout both companies. Schonberger stresses that merely communicating between the sales department and procurement is not sufficient. Of course, if you're a reader of Dan Beaulieu's weekly columns, you'll be familiar with this idea. [4] It is interesting from the viewpoint of 2021, to read this passage on page 162: "Most of our larger industrial companies have caught the world-sourcing fever…world-sourcing flies in the face of the WCM concept…develop a few good local sources and stick with them." He cautions that world-sourcing's risks are significant and must be offset by "substantial" cost/exchange savings. Our contemporary perspective can see that Schonberger's use of the word "cost" really should be "price," as the savings here will be needed to offset the Richard J. Schonberger

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