There is a need for the Lean Enterprise to take a strategic and systematic approach to the suppliers, rather than engaging on a tactical, short-term and purchase-to-purchase basis. A key part of this is engaging with the right suppliers, with the right capabilities and willingness to align with the objectives of a lean enterprise. The number of suppliers needs to be a manageable number, while ensuring that only suppliers who are suitable are selected.
Supplier Assessments are the means for gauging the capability and capacity of the supplier to meet the client’s business and lean operating requirements. Supplier assessments should take place before developing a long-term strategic relationship. They enable you to assess at an early stage whether or not supplier development is feasible and determine if suppliers can deliver lean processes. The key aim of assessment is to encourage the right suppliers with the right structure to respond to your lean transformation.
The formal assessment process for suppliers is the same as for the business or site level as a whole and or specific cell required to meet specific product or service. Supplier assessment tools offer a great benefit to the client. Issues and risks are made visible early on in the lean transformation, minimizing problems later and maximizing the likelihood of success. Complex, innovative or development programs can be shaped so that they are ‘in tune’ with the relevant lean deployment strategy of the business.
The Supplier Development strategy is built with a customer supplier Value Stream Analysis defining the process for the development of suppliers and their value creation process. It also sets the criteria against which suppliers will be assessed during procurement. It provides the concrete link between the aims and priorities of the client as a whole and their suppliers. It is therefore vital that the assessment and development strategy successfully translates the two to three most important expected deliverables of the business transformation activity to the right suppliers being chosen for long-term relationships.
Supplier Development Programs provide a proactive and constructive approach on the customer side. Supplier expectations may need to be managed and their preconceptions confronted. Clients also need to be prepared for constructive challenges from suppliers and have the organizational maturity to deal with it and take useful learning from it.
The guidance in supply chain management focuses not only on day-to-day management of performance, service delivery or peer-to-peer relationships, but also on strategic performance: the ‘health’ of the relationship between customer and supplier. The key deliverable of this process is the Supply Chain Strategy including evaluation plans and models, criteria for supplier selection and ongoing plans for assessments and progress reporting.