Part 1 of a 6 Part Series: Building Infrastructure Strength for Future Growth - Cultivate Supplier Relationships

Part 1 of a 6 Part Series: Building Infrastructure Strength for Future Growth

 

Each week, we will go into details on how to address project and change management now to create a resilient and robust organization for tomorrow.

Recent months have clearly demonstrated that business is always vulnerable to forces that are often outside of their control. But it does not mean they do not have control to prepare for such events. This blog series will address key projects and initiatives that procurement organizations can take on to improve internal operational and organizational processes and procedures. The first point to consider is how much value an internal project brings to a company, If all of an employee’s time is considered overhead and they never work on any client or customer-facing initiatives, it becomes much more difficult to determine the return on that investment. Every organization understands the importance of having such people on staff. IT, HR, and Accounting are typical departments where the time dedicated to the job is nearly 100 percent internal focused.

On the other side of the spectrum are the employees who directly work with or for clients or customers. Whether in sales, manufacturing, or engineering, most of the time spent by those team members is focused on products and services directly tied to a client or a customer. If an employee’s time can be attributed to a product, service, or a specific job, then it becomes easier to determine profitability and the success of those work streams.

So what happens when there is a temporary situation where those employees no longer have sustainable work coming in? What happens when there is a lack of product getting sold, no new clients coming in, the economy is in a tailspin, or there is a global pandemic nearly shutting down the entire global supply chain?

Companies should always have a strategy in place to navigate unexpected economic fluctuations due to industry uncertainty, national policies, or global calamities. When a crisis strikes, leadership can then pivot to those internal projects that are very important to a company’s overall efficiencies and ultimate successes but often get left on the back-burner due to the more immediate needs of clients and customers. The ability to reapportion project downtime by tackling those internal tasks or procedures that are often overlooked could be the key to a company’s survival when the work begins to pick back up.

A strong change management process is key for any organization to navigate corporate evolutions that arise – both planned and unforeseen. Change management provides the processes, tools, and techniques that guide leadership and employees through shifts in responsibility, while also fostering the productivity the organization requires to achieve business outcomes. When the organization needs to adjust how work will be done, change management focuses on how to help employees embrace, adopt, and utilize changes in their day-to-day work.

This week, we will look at the 1st of 6 ways a company can use downtime to impact the greater good of the organization and position themselves to be a better, stronger company when the work picks back up.

Cultivate Supplier Relationships

A critical component to any company’s success is its ability to maintain strong working relationships with suppliers and vendors. This may sound like an obvious statement but, oftentimes, both sides of the partnership become complacent in their processes. While everything appears to be fine (if it’s not broke, don’t fix it), opportunities to improve the relationship can be overlooked. Examples include streamlining processes or procedures and adjusting costing models that could ultimately save money. Those responsible for managing the relationships with suppliers should always be looking to challenge the status quo.

Specific Example: Engage in Process Mapping with Key Suppliers

Engaging a key supplier in a process mapping effort can be a very powerful method for improving business performance and increasing the valuable contribution of that key supplier. Process Mapping is the technique of using flowcharts to illustrate the flow of a process, proceeding from the most macro perspective to the level of detail required to identify opportunities for improvement. Process maps can be applied to anything from the journey of an invoice or the flow of materials, to the steps in making a sale or servicing a product. Mapping helps address questions related to individual and team performance, quality of work life, and work design.

As the trend toward outsourcing continues to grow, treating key suppliers as business partners becomes far more important to a successful enterprise value proposition. Top suppliers want to come to the table with a “help me help you” partnership philosophy.

Once a company has created a process map for all suppliers in a specific category, it becomes easier to see where supplier redundancy occurs and where there are opportunities for supplier consolidation. Companies should also use this exercise to identify the strengths and weaknesses of their suppliers and determine if the correct relationships are in place. Just because a supplier can do something, does not mean they should do it. Conversely, you might have suppliers capable of doing great things for the company that you may not have been aware of. Process mapping will help to identify those potential services or offerings. The goal is to make sure you have the right suppliers in place performing the services they excel at.

Example Tool for Process Mapping

SIPOC (A Six Sigma Tool)

Please check back next week for a look at part 2 of this series where we will discuss ‘Accessing Inventory Management’.