Time to market is one of the major reasons we look to the global economy. Acquisitions and mergers can take us across international borders to quickly gain the intellectual property we need. International supplier sourcing can get products more quickly to our manufacturing sites and our customers, or broaden our foot print in a country quicker and faster.
While the global economy can help us realize productivity gains, we need to carefully manage it so operational excellence across the value chain can be realized. As manufacturers, we got really good at managing our domestic raw material suppliers and our own factories who were supplying our local customers…but remember, it took us years to get this down and develop systems.
The strategies that we have to embrace has our organizations focusing on reducing risk from the highest enterprise-level risk down to managing supply chain risk. There is expanding quality focus as we grow our customer base and enter new markets. We will have to stay compliant as the regulatory/quality requirements are constantly evolving, putting an increase on internal global procurement policies and tighter controls and practices on supply chain management.
- As we build these complex value chains we have different types of relationships:
- Suppliers & Customers in any country
- Private Label Manufacturers
- Contract Manufacturing Operations (CMOs)
- Local and International Distributors
- Outsourced Development (R&D)
- Outsourced Services: sterilization, distribution, packaging, Regulatory Services, etc.
- New Technologies & Acquisitions
Each of the different suppliers determines different types of communication and responsibilities that have to be sorted through to ensure the appropriate control of the interactions of the relationships.
Some of the supply chain problems we have with our global suppliers are the same as what we had 20 years ago with local suppliers. They do not have the technology nor the business processes in place to quickly manage the needs the OEM has to put on them, to find and manage information. We need to think of sharing information with customers and suppliers and we need to make that process more efficient.
With paper-based solutions, the increase of suppliers and monitoring quality, performance with supplier systems becomes even more challenging. Minimizing the risk of liabilities, manufacturers need to have global visibility into their supplier performance across the entire organization and all their product lines to ensure consistency, quality control and compliance.
Based on your supplier relationship, you should develop a Supplier Contract so you can define your expectations of each customer and supplier throughout your value-chain. This will detail what you are both going to do and when you will do it when that “event” occurs. Because you know it will – it’s just a matter of when it will.
So what’s needed to help you manage the business processes that you are going to have to “control” and to ensure “compliance” between both your suppliers and your customers? A top-down architectural approach to compliance and quality for any business process that you need to “integrate” between your customer or your supplier, so that it is flexible enough to allow for continuous improvement. Plan – Do – Check – Act.
A flexible approach can help enforce compliant process performance and control; monitor information accurately and in a timely manner for decision support; support change management throughout the value chain; be supported by metrics to mold culture and behavior; sense and respond to nonconformances as they occur; have procedures to correct problems that result; and, have the tools and processes to prevent the problem from recurring by improving design or process. In doing so, it can provide a framework for continuous “real time” assurance of quality, compliance and continuous improvement to help achieve operational excellence.
We need to maintain close relationships with our suppliers’ Quality systems because ultimately, we are responsible for the entire product quality. Look across your supply chain and see what technology your suppliers’ are using, and then look to see where you can automate your business processes and integrate so that you can get access to real-time information. And finally, leverage a business intelligence tool so that you can pull information from various data sources to get the types of metrics and analytics that you need to make the right decisions at the right time.