Strategic Supply Chain Management - Supply Chain Online

164 Strategic Supply Chain Management
Many of these component manufactures sell to OEMs that outsource
production to contract manufacturers—often multiple contractors in multiple
locations. A component manufacturer selling to five OEMs, each
with five manufacturing partners with five manufacturing facilities, must
support 125 different manufacturing sites. “That means 125 forecasts
coming in each week,” Frazier points out. “Without major investments in
people, systems, and infrastructure, this is a very difficult model for most
component manufacturers to support.”
Often, OEMs or EMS providers develop the “master plan” for a collaborative
relationship—a plan that optimizes their own benefits.
Suppliers are expected to provide value-added services as the cost of continuing
to do business. Yet, if you expect your suppliers to provide additional
services and to take on additional risk at no additional cost to you,
your chances of getting them on board are small. And even if you do succeed
in getting them to “sign up,” you may find that they’re unable to meet
the requirements you’ve set for them. Instead, work closely with your
partners to develop a value proposition they can understand and buy into.
Create an agreement that fairly values the added services you want them
to provide—and pay them an appropriate premium.
Successful collaborators make a major effort to bring their partners
up to speed. Some of the best practices involved in offering a compromise
include providing a technology solution to them at little or no cost and
working closely to get them up to speed with any new technology.
Purchasing a license and having it installed at your supplier, however, is
not collaboration.
Finally, be sure to set up a way to monitor the results of your collaborative
relationships. Work with your partners to establish a set of metrics
that is consistent with the value proposition and can be updated and
reviewed on a regular basis.
NEXT-GENERATION COLLABORATION
A critical aspect of collaboration is the need to capture and react to
changes in a partner’s planning data. Most of today’s collaboration tools
are built on centralized databases. Since it can take hours to assimilate and
process data collected from numerous sources, companies often make
decisions based on historical data. If you’re an international company with
headquarters in the United States, that might be where you keep your central
database. The tools need the data to be centralized in order to do
global analysis—otherwise, they are just optimizing local information. To