Supplier Assessments: Key to Improving the Value Chain
By Brandon Phoenix, Business Consultant with TMAC (Consulting Firm and MEP affiliate) based in Dallas, TX Metroplex. Brandon has over 20 years of business and manufacturing experience with an emphasis on supply chain optimization, lean enterprise, manufacturing leadership and quality management systems.
Simply stated, the value chain consists of value-added activities and business processes within an organization that are required to provide goods and services to the customer. Often, when companies perform supplier assessments, key focus areas are not adequately addressed.
The value chain and the supply chain are so closely related that it is essentially looking at the same flow from two different perspectives. The supply chain describes the flow of resources from the supplier to the customer. The value chain is the flow of value (as perceived by the customer) from the customer to the buyer.
Terry Weiner / Sr. Consultant California Manufacturing Technology Consulting® (CMTC) sums it up nicely stating, “if the customer perceives no value in what the supply chain provides, there will be no demand. If the supply chain cannot deliver resources that the customer values (at the price the customer is willing to pay) there will be no flow.”
When assessing your supplier, it is key that companies ensure their organizational processes are indeed adding current, as well as future value to the interaction.
Think about 4 areas when performing assessments:
- Customer Focus
- Planning Processes
- Internal Practices and Processes
- Strategic Alignment between the tiers of the supply chain
By focusing on these key areas you can determine if your suppliers are truly adding value and value is a necessary component in remaining a sustainable member of industry.
Contact Brandon Phoenix at brandon.phoenix@tmac.org for more information on the MEP Supply Chain Optimization program, and learn how to ensure value with every interaction within your company.
Image courtesy of www.fastorq.com.
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Remember, the internal processes of your vendors can spill out and impact you. Their red tape could get in the way of your next order! But all your customers see is that you didn’t deliver.