Leveraging Your Supply Base

By Robert A. Rudzki, SCMR Contributing Blogger
August 02, 2010 - SCMR Editorial

When the subject of “leverage” is mentioned in a procurement department, it usually refers to bundling of internal needs to create as much buying power as possible. That’s a good and valuable concept. The purpose of this post is to suggest another, equally-valuable perspective on “leveraging your supply base.”

Leading companies often take advantage of a powerful source of competitive advantage: preferred relationships with their suppliers. Research shows that these customers receive preferential treatment from their suppliers in two important ways:

1. Direct investment made by the supplier to benefit a single company, such as dedicated capacity, exclusive use of a new technology, or key engineers assigned to the customer’s product development teams.
2. Exceptional service, such as preferential scheduling of orders, more frequent deliveries, better pricing, shorter lead times, and similar advantages.

Are you the type of company who consistently receives preferred treatment and investment from your suppliers? Or are you “just another customer” - one of the many who fail to capture the benefits that a world-class supply base can provide?

Do you even know how to “leverage your supply base” in this regard? Where would you start? A great first step is to survey your supply base.

If you find this topic intriguing, you can download an information sheet at the Greybeard Advisors website:

http://www.greybeardadvisors.com/services/supplier_satisfaction_survey/



About the Author

image
Robert A. Rudzki
SCMR Contributing Blogger
Robert A. Rudzki is a former Fortune 500 Senior Vice President & Chief Procurement Officer, who is now President of Greybeard Advisors LLC, a leading provider of advisory services for procurement transformation, strategic sourcing, and supply chain management. Bob is also the author of several leading business books including the supply management best-seller "Straight to the Bottom Line®", its highly-endorsed sequel "Next Level Supply Management Excellence," and the leadership book "Beat the Odds: Avoid Corporate Death & Build a Resilient Enterprise." You can reach him through his firm's website: http://www.GreybeardAdvisors.com

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Following the lead of its Congressional Colleagues in the House of Representatives, the United States Senate yesterday approved a measure geared to keep federal surface transportation funding intact through the end of December with a nearly $11 billion stopgap fix.

XPO Logistics announced second quarter earnings and the acquisition of two companies, New Breed Logistics, a non asset-based 3PL focusing in contract logistics services, for roughly $615 million, and Atlantic Central Logistics, a 3PL provider of last-mile logistics services, for roughly $36.5 million.

The report, entitled “Outlook for the Domestic Transport and Logistics Market in 2H14 and Beyond,” takes the view that strong freight levels in the second quarter have left trucking companies in a good position: one in which they need to come up with new plans to handle rising demand. But even with that positive momentum afloat, the report observes that there are some familiar challenges intact, such as a lack of qualified drivers and the regulatory drag from the new hours-of-service rules that took effect in July 2013.

Flags of Convenience are a fact of life in the commercial maritime trade, but several European political action groups are worried that they will pose a threat to the Continent’s air cargo industry.

For May, which is the most recent month for which data is available, the SCI is -7.5, following April’s -7.5. FTR said this reading represents a still-tight capacity environment, as utilization rates hover between 98 percent and 99 percent.

Article Topics

Blogs · Technology · Procurement · EPA · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.