Take Four Steps To Improve Your Supply Chain Relationships

Over the last several years, electronics companies worldwide have experienced firsthand the tremendous impact unexpected supply chain management glitches can have on their bottom lines. For example, the fundamental importance of strategic supply chain management came to the forefront after the tragic earthquake and nuclear accidents in Japan earlier this year.

Similarly, the sudden economic downturn of 2008 followed by the steep upturn in the fourth quarter of 2009 caught producers by surprise, making it difficult for non-optimized supply chains to meet existing demand, let alone map out potential growth activities or plan for future new product launches.

These events underscore the important role supply chain management plays in avoiding glitches that can lead to financial loss. The supplier-distributor relationship is an important part of this equation, especially when it comes to supplying a company’s technology needs. From the end user’s perspective, identifying a powerful supplier-distributor partnership can go a long way toward ensuring an optimized supply chain.

The Supplier/Distributor Relationship

As recent events have demonstrated, the old “go-to” standards for supply chain evaluation are no longer sufficient. It is not enough that a supplier provides quality technology and a distributor has a truly global reach and rapid response time. These qualities are now expected and are no longer considered added value.

In an increasingly global and competitive marketplace, supply chain management must reach farther. End users must identify a strong partnership between their technology suppliers and their distributors, as both must be strategic planners to ensure an optimal supply chain for today and tomorrow. With increasingly rapid swings in business cycles, there is simply no time for weakness on either the supplier or distributor side.

There are four factors design engineers and purchasing professionals alike can look for to ensure they have identified a powerful supplier/distributor partnership: industry leadership, investment in the future, going beyond supply chain management, and superior technical support.

Industry Leadership

To ensure that a technology supplier and its distributor are global leaders in their industry, ask questions such as:

Are the supplier and distributor demonstrated experts in their industry?
Are they visible in leading industry publications and forums, commenting on emerging trends?
Are the supplier and distributor financially stable and supported by a strong global business?
Are both the supplier and distributor well known and trusted industry brands with demonstrated longevity in your industry?

Investing In The Future

To effectively plan for optimized supply chain management in the months and years ahead, both technology suppliers and distributors need to be planning today for their customers’ needs in the future. To make sure that they are, ask questions such as:

Do the supplier and distributor look beyond today’s economic environment to ensure you get the supplies you need in the future?
Were they able to meet supply needs quickly during the latest economic upswing?
Do they have a customer-centric strategy in place for managing unforeseen events?
Do they provide a steady stream of new technology launches?
Are they making infrastructure investments to ensure they are prepared to best serve emerging and evolving markets?

Beyond Supply Chain Management

Distributors in particular should constantly add value-added services to enhance supply chain management. Ask the following questions:

Does the distributor not source from alternate suppliers unless specifically requested?
Does the distributor place the customer’s long-term relationship and steady technology performance above any temporary margin gains it would receive from substituting a technology with a similar product that might momentarily provide it with a higher profit margin?
Can the distributor provide automated quoting and bill of materials (BOM) management capabilities for ease of doing business?
Does the distributor provide worldwide visibility and supply chain metrics online?
Can the distributor provide download-on-demand reporting?
Can the distributor provide full-planning horizon visibility online?
Does the supplier-distributor partnership have the production flexibility and inventory management necessary to cost-effectively accommodate high-, mid-, and small-volume orders according to your evolving needs?

Superior Technical Support

End users can ask the following questions to ensure that suppliers and distributors work together to provide seamless, market-leading technical support:

Does the supplier have design experts ready to serve as a de facto extension of your own product design team at no additional cost?
Does the supplier know how to integrate distinct technologies into a comprehensive solution?
Can the supplier provide information about a wide range of off-the-shelf as well as custom technologies for your particular industry and application?
Do both the supplier and distributor have expertise in potential migration technology for your specific needs?
Do the supplier and distributor work together to provide online tools to train and educate design engineers on emerging technologies?

While it is difficult to know with any certainty what type of supply chain glitches might arise in the months and years ahead, identifying a solid supplier-distributor partnership with demonstrated industry leadership, significant investments in emerging technologies, cutting-edge resources, and superior technical support can play a crucial role in making sure your company is ahead of the curve in maintaining optimized supply chains.