The Asian Spin on SRM

November 19th, 2008 at 06:43am David Bush - Iasta

Tomkins Associates released some survey results from a recent study they did regarding supplier relationship management with Asia.

With the promise of capitalizing on the low cost labor in Asian counties, businesses have been in an incredible rush to capture the economic benefits. However, companies that do not do their homework are often surprised to find that the business practices they are accustomed to in North America do not work as well in Asia.

In the report, which was authored by Bruce Tomkins, Colin Maxwell, Steven Ganster of Tomkins, highlights of the top 10 lessons learned are summarized.

1. Have a presence in the area and at the sourcing company.

2. Obtain expertise in the complex and varied rules and practices of Asian countries and companies.

3. Pay particular attention to product quality.

4. Be prepared to accommodate extended lead times.

5. Understand the importance of building long-term business relationships with Asian suppliers.

6. Fully understand supply chain capacity and potential constraints that may create barriers for delivery from Asian suppliers.

7. Develop supply contingency plans.

8. Don’t assume anything.

9. Implement a solid monitoring and audit plan.

10. Maintain communication, communication, communication.

Most of these are things that can be analyzed upfront through the usage of RFx surveys, although final analysis will certainly need to be qualified and confirmed onsite and off line.

Additionally, many organizations can take advantage of advanced sourcing optimization by addressing each of the supply risks as different constraints in a scenario model. These can all be layered together, or separated by importance. Through the process of collecting information and resulting bids, a sourcing team can determine the best subset of suppliers quickly, before making final judgment and award.

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Entry Filed under: General, Global Supply Issues/Risk, Optimization, e-RFx