Part II of the Supply Chain Series revolves around the fact that the purchasing department should already be on board during product development for resilient supply chains. The product development and procurement strategy should be coordinated.
Supply chain expert Beat Buser:
You just said that the development of resilient supply chains must be anchored in the DNA of the company. What do you mean by that?
The product development process and procurement process should have a common focus from the very beginning: the specification of raw materials and components and the corresponding procurement strategy must be coordinated.
In concrete terms, this means that if the research and development department sets specifications for a product, they should communicate these to strategic purchasing. In this way, the purchasing department can already search the market for possible suppliers and assess their risks at this early stage of the product development process. In this way, so-called "single sourcing" situations as well as geographically/geopolitically critical situations can be identified and avoided at an early stage. Once the product is on the market and possibly certified, this becomes much more difficult.
And how exactly does the purchasing department proceed with these clarifications?
There are basically two ways to check supply chains for their resilience:
- One is the implementation of so-called "end-to-end" supply chain audits using standardized questionnaires. The questionnaire is sent to all possible suppliers along the entire supply chain to be filled out and evaluated.
- A comprehensive on-site audit of the most important key suppliers and business partners is recommended to ensure that the previously defined procurement criteria can be met.
For both methods, comprehensive criteria must first be defined, which are derived from the corporate strategy. These include, among other things
- Defining minimum standards for products, components and service levels
- Naming alternative suppliers and partners
- Searching for alternative raw materials and/or extended specifications as well
- The development of contingency plans
That sounds like a lot of work.
That is indeed a lot of work. But it definitely pays off: On the one hand, this eliminates supply bottlenecks when launching a new product. On the other hand, processes were defined right from the start, which are also available to check the supply chains in the further life cycle of the product. And: These processes, questionnaires, etc. are available for every new and existing product and only need to be slightly adjusted. In the long run, companies save themselves much trouble and money because they can act with foresight and don’t have to react to problems.
Is there more to know?
In any case, I also recommend the use of an integrated ERP system (planning system) and transparent S&OP (sales and product planning) in this context. With these tools, speed, efficiency and transparency can be guaranteed, because delays and bottlenecks are identified early on and companies can react accordingly. In this way, a company always remains capable of acting.
Hier geht es zum Teil I und zum Teil III der Supply Chain Serie
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