Dig deep to mine supplier savings

Most companies focus their supply chain improvements on tier one suppliers, not the entire supply chain. That’s a lot like paying attention to just a few categories of spend, and it’s likely leaving opportunities untapped.
The first step in the right direction is mapping your complete supply chain from raw material to delivered product. It’s surprising how few companies actually do that. The usual reasons are a lack of resources and management commitment, or a lack of understanding the value of that knowledge.
If the thought of mapping everything is daunting, select a category where you think there might be untapped value and you have good relations with a tier one supplier or two. Run a pilot test by mapping the supply chain for a single product. If you find an ROI by working through your tier one relationship to others in the chain — you’ve got an argument for more resources to run similar programs in other categories.

 

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