How to Effectively Integrate a New Supply Chain Partner

Successful businesses are built on collaboration. Think Sales working together with Marketing, or Production with Procurement. Smooth collaboration, however should also extend beyond your organization. By becoming a trusted partner—not just another vendor—with your customers you can drive their success as well as your own innovatively improving the products and services you provide them, guided by their input and feedback. In the same way, your suppliers and the other parties in your supply chain can cut your costs, increase your revenue, and enable you to reach new markets by becoming an integrated supply chain partner.

Here are the best tips for integrating a new supply chain partner:

Agree on a common, consistent performance management system

Get alignment on the essential metrics, software for supply chain management, etc . . . When drawing up those metrics, create based on total value, not just the standard supply chain scorecard criteria of customer service, cost, quality, and safety.

Ensure that everyone on both sides has the access to the data and systems they need

This includes collaboration tools. With two organizations, multiple interacting workflows, many departments, and time-sensitive objectives (like delivery dates and last time buys), keeping everyone on the same page is critical. Customer web portals and cloud-based collaboration platforms are just two ways to keep everyone in sync.

Maintain good communication

Communications shouldn’t be limited to online tools like email and web portals. Conference calls, on-site visits, and monthly review meetings should all be utilized so that issues are elevated and resolved long before they cause lines to go down or result in missed delivery dates.

Be in it for the long haul

The best results are achieved when both enterprises engage in long-term collaboration rather than short-term initiatives. Longer commitments incentivize the investments and justify the efforts put into innovating that in turn generate the biggest gains. Also, long-term collaboration provides more stability for strategic planning.

Establish visibility into your partner’s operations through real-time data

Ideally, your new supply chain partner should function like an extension of your own team. Direct, real-time data sharing can minimize the risks of miscommunication, communication delays, and improve supply chain responsiveness through automatic ordering. This was how Wal-Mart and Procter & Gamble boosted their profits by $50 million in the first 8 months of their collaboration back in the 80’s.

Focus on vendors with similar goals

For example, a contract manufacturer (CM) who specializes in product refurbishment, repair, and other reverse logistics functions would be a great supply chain partner for an OEM striving to reduce scrap rates and minimize material sent to landfills. Common goals mean shared passion and dedication for achieving them. That’s the “raw material” for a successful collaboration.

Pare down the number of your suppliers

Supply chain partners aren’t Facebook “friends, “ they require continual time, effort, and other resources in order to produce any benefits. Your company’s time and capital are finite resources that can be spread thin by trying to maintain relationships with too many suppliers. Instead, make vendor consolidation a key goal before embarking on major supply chain collaborations. Full service CM’s are great for one stop shopping and they also make great supply chain partners.

RiverStar is a full service contract manufacturer who’s business model centers around becoming a reliable supply chain partner for our OEM clients. From just-in-time deliveries to handling eCommerce order fulfillment, RiverStar delivers win-win supply chain solutions.

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How to Effectively Integrate a New Supply Chain Partner
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How to Effectively Integrate a New Supply Chain Partner
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Successful businesses are built on collaboration. Think Sales working together with Marketing, or Production with Procurement. Smooth collaboration, however should also extend beyond your organization.
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RiverStar Inc.
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