Many companies have run 'supplier improvement programs' over the years. However, suppliers are used to these flavor-of-the-month initiatives, and simply show a few changes as proof of their cooperation, then wait for the next program to come up without actually improving.
Now, if you really want your current initiative to succeed, what should you do? Here are 5 tips for an effective supplier performance improvement initiative.
1. Set The Tone
Firstly, it must be the “[your company name] way”, not a “program”. Your company has to establish clear standards that all suppliers need to follow if they wish to be your suppliers, and this will remain for at least the next 10 years. In addition, you have to showcase correct signals to suppliers. For example, show involvement from the CEO.
As Deming used to say, you need to show ‘constancy of purpose’.
2. You Need a Trigger
Secondly, there needs to be a clear trigger to get the supplier moving (e.g. a plan to transfer business away, serious chargebacks…). This has to feel different from the previous improvement programs.
3. Training & Engagement
Thirdly, it is important to follow a due process that includes:
- Making sure the people understand why the changes are needed and can see the positive results – slowing down and training people along the way does help a lot in the long run.
- Providing experiential training – not classroom training. People have to learn in a practical setting as they apply new concepts. As a result, their understanding of new ideas will be much deeper.
- Encourage people to suggest ideas and, if it makes sense, apply their ideas as much as possible. It helps foster their sense of buy-in.
This is quite different from the approach of typical SQEs.
4. Improve the Supplier's Management Systems
Fourthly, the factories’ management systems should be improved as well. Otherwise, no improvements are likely to “stick” in the long run. Here are two important aspects of it:
- If the teams doing the work are not rewarded for it, why would they bother?
- If there is no early alarm system when one of the improvements starts to unravel, there is no immediate reaction from the leaders/managers, and soon all the improvements will unravel!
5. Make the New Processes Robust
And, finally, the new initiative needs to be tested and validated in different conditions. Not just when all is going well, but also when conditions are not ideal. For example, when there is a rush to ship products out when some materials are found defective when things go wrong at the last moment, and so on.
To learn more about how you can achieve quality improvements while cutting costs to maximize efficiency at your factory, download our complimentary eBook below.