Issue link: https://iconnect007.uberflip.com/i/1524755
AUGUST 2024 I SMT007 MAGAZINE 13 If you view relationship building a one-time event, you will likely fall short of the trust necessary to thrive. the ones who will oen be making the deci- sions that most impact you. Invest in relationships when times are good. You want to create "relationship capital" in reserve for a later time. If you only try to build relationships when you are having issues it won't work. Visit your suppliers at their facil- ity. See their work environment. Learn about your supplier. en, use that relationship capi- tal carefully. Don't take advantage of those rela- tionships just because you can. Draw on them when you really need them. If you view relationship building a one-time event, you will likely fall short of the trust nec- essary to thrive. Trust is earned, not granted, and takes consistent words and actions by both parties. I am not suggesting it is blind trust; I have certainly always reserved the right to "trust but verify." Bottom line: It is about people getting to know each other and demonstrating they care about the success of both companies and the people who work for them. Develop Design-level Sourcing Strategies Too many companies allow sourcing strategies to happen aer the design decisions have been made and they effectively become separate activities. ey should not be separated. It is in everyone's interests, includ- ing suppliers, to ensure supply chain and design are aligned before key design compo- nents are ever decided. Instead of allowing design decisions to spread across whichever parts look best from a web search, work with the designers to estab- lish a core set of manufacturers who can meet your product needs and perform to your prod- uct lifecycle expectations in terms of cost, delivery, flexibility, or whatever combinations matter most to you. is means you will need to agree on a small set of manufacturers that are most strate- gic and break the ties with others who do not move you towards those strategies. ey need to meet design and product needs and perform at a high level in their day-to-day execution. You may still need to use many other manu- facturers to meet unique design needs, but the benefits of leveraging a small number of strate- gic manufacturers will far outweigh the further dilution of the balance. Share Your Real Demand With Long-term Commitments Talk with your supply base about the best ways to protect your long-term supply while balancing the risk of committing to parts you may not need. Find that balance together. A good supplier knows it is not in their best interest long term to oblige you to parts you do not need, so give them the chance to help. If you are in a constrained e n v i r o n m e n t a n d y o u know you have recurring demands, don't be afraid to make multi-year commit- ments or enable suppliers to work directly from your forecasts. Recognize, how- ever, that virtually all customer ERP systems are filled with nega- tive numbers during allocation peri- ods and talking about how negative your inventory balance is will be useless as a differ- entiator. Instead, change the conversation to be about how end customers are affected. If you have a certain daily quantity that you need in order to keep a customer line running, then give the supply base that number and work to build the trust that you are not asking for any more parts than you need to satisfy your customers. Suppliers want to sell parts where they have the greatest impact and don't want the risk of you trying to return them because you were driving excess.