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30 The PCB Magazine • August 2015 Friberg: Buyer-supplier relationships in the sup- ply chain are one of the most important ele- ments of supply chain integration. Establishing and managing effective relationships at every value-link in the supply chain is a critical pre- requisite of business success. However, at times that relationship becomes one where a company says, "Well…we have a history with this supplier and they know our business model; if we start to measure everything they do, we will lose them as a key vendor." With this approach many companies simply don't feel the need to develop the toolsets/skills to reset the playing field. Complacency sets in. Williams: I had to think about this for a minute, Fane, because like most of us, I normally think of quality problems when discussing the war on fail- ure. But what your example really drives home is that delivery has just as great an impact on failure as quality. Should delivery and quality be weight- ed evenly when developing a supplier scorecard? Friberg: In my mind, any time the full terms of the purchase order are not fulfilled, it's a failure. In a high-tech business, we natural- ly progress to the technical aspects, because by nature we want to solve. Supply relation- ships are binary; they are either transactional or relational. A key implication for leaders is that they should recognize the goal of buy- ing, the strategic importance of the object of pur chasing, and choose accordingly between the different types of supplier structures. The supplier scorecard highlights the purchasing strategies of their supply relationships and the motive for purchasing. Different strategies highlight different aspects and events that ultimately manifest themselves in the firms' business models. Williams: So that's a yes? Friberg: In a very long-winded answer, abso- lutely! Williams: Over the course of your career you have seen how a lot of different companies manage their supply base, and as we both know, some do it extremely well and others not so much. What are some of the more common mistakes organizations typically make in this area? Friberg: The most common mistake is having terms and conditions negotiated by the sourc- ing team that are not consistently measured by the enterprise and communicated formally back to the supplier. Again, basic blocking and tackling: •Cost: If there is an agreed to PPV (purchase price variance), is that being obtained? Is the consumption rate above, below, or at the nego- tiated rate? •Quality: In a Lean value stream, the collab- orative goal needs to be, how do we get to 100% dock-to-stock? Checking at the end of the sup- plier line, or at your receiving dock for defects, is a defect in itself. • Delivery: Cost is dictated by market, qual- ity is intended to be a given, and the delivery element is the leverage point that can disrupt the overall value prop- osition—both for the supplier and the manufacturer. So, from my perspective, the most common mistake is not having a ro- bust, clear supplier scorecard with per- formance criteria that both the supplier and the manufacturing facility align with. From company to company, the weighting of the supplier scorecard el- ements should vary between industries and where in the product life cycle that AN INTERvIEW WITH FANE FRIBERG continues FeAture