Is Your External Supply Network Up to Snuff?

May 31st, 2007 at 05:22am David Bush - Iasta

Supply & Demand Executive recently ran an article that an organization can use to determine whether it needs a more strategic approach to manage external supply networks. The article presented ten questions and indicated that if an organization answered yes to at least half, then it should consider investing resources to better understand and strategically manage it’s supply network needs.

The ten questions presented were:

• Are we struggling in the adoption of our revenue models to changing marketplace needs?
• Do our customers require increased flexibility despite rising complexity?
• Are we sourcing from, selling into, and servicing our products in global markets?
• Do our suppliers play a key role in solution design?
• Do we manufacture less than 50% of the parts and assemblies that go into our products?
• Could we make use of an early warning system to reduce supply risk and identify supplier issues before they become serious?
• Have we reached the limits that our internal systems can support in facilitating external collaboration?
• Are we still looking for a C-level Executive to champion the business value that external supply relationships can bring?
• Would we classify our need to secure information both from an IP and regulatory perspective as high?
• Do we need to put programs in place to understand the total cost of ownership of each component we make or source?

Why is this important? Strategic Sourcing only identifies savings, proper supply management after the fact is what delivers them. Considering that this depends on a properly managed supply network, it’s important not to overlook the external requirements when doing your internal calculations - and this means its important to determine whether or not your external supply network is up to snuff.

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Entry Filed under: General, Supply Management Best Practices