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36 The PCB Magazine • August 2015 Friberg: Although various supply chain struc- tures are successful, my personal preference is to align the supply chain managers by com- modity. If one does not exist, then a high-level supplier scorecard will need to be developed that each commodity manager reviews the ob- jective outputs (Cost*Quality*Delivery) vs. the subjective performance execution. In parallel, determine how many suppliers the organiza- tion will need within that commodity family to be successful. More times than not, this yields a few of the predictive metrics and "a-ha" mo- ments you mention in your question: • The suppliers that are sometimes thought to be the best from a customer experience perspective may not be the best performers. • Conversely, suppliers that are perceived as poor performers may not be poor. Somebody is relying on something from 10 years ago that has followed this supplier through the years. • As it relates to how many suppliers are needed, most times this process shows, "Wow we have way too many suppliers in that commodity, not enough in that one, and some of our suppliers are not in the best geography to support our execution dividend." Start with very simple predictive analytics, but get a common baseline to drive improve- ments. As the organization gets deeper into sup- plier scorecards and paired comparisons, the model can be enhanced to obtain more finite analytics. Williams: OK, so now we have developed a supplier onboarding process to make sure that we are engaging with suppliers that have a high probability to become long-term partners. Let's talk about what kind of analytics can be put in place to not only monitor ongoing sup- plier performance, but also drive supplier im- provement. Friberg: The most critical step here is that the supply chain organization agrees on what are the expectations of supplier analytics. The entire process will lose market credibility if the data shows one thing, but the commod- ity leadership conveys a message to the sup- ply base that is subjective in nature and not fact-based. I mentioned paired comparisons a couple of times during this discussion. Let me chan- nel my GE days here a little. If there is not a quantifiable analytic for improvement, go get 10% Year/Year. If you are able to use the paired comparison model, you can show each suppli- er how they are performing against the other suppliers in their commodity (excluding infor- mation like cost, pieces, PO count, SKUs, etc., which would derail the conversation to suppli- ers spending time trying to figure out who the other suppliers are vs. driving improvement on the specific metrics). Even if the supplier you are working with is #1 in the commodity C*Q*D, there is always an element that they can improve upon. Establish that improve- ment objective to be reviewed at the new busi- ness appraisal. To quote Herm Edwards, "Hello—you play to win the game." Williams: As always, Fane, this has been a very interesting and enlightening discussion and I ap- preciate your willingness to share your expertise on this topic. Any final words of wisdom? Friberg: How to win the war on failure: Con- tinue to break any and all constraints that keep the supplier from having any negative impact on your competitive advantage. Align strategy with people and culture to optimize the supply chain: passionate pursuits, measurable success, and sustainable results. PCB AN INTERvIEW WITH FANE FRIBERG continues FeAture Steve Williams is the president of The right approach consult- ing llc and the former strategic sourcing manager for Plexus corp. He is the author of four books, including Quality 101 Handbook and Survival Is Not Mandatory: 10 Things Every CEO Should Know about Lean. To read past columns, or to contact Williams, click here.

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