True Partnership Is an EvolutionPosted: May 7, 2012
When your customer is a leading medical researcher requiring thousands of different products from latex gloves to radioactive materials, it requires a true partnership between customer and supplier. This is exactly the type of relationship that exists between John Willi, C.P.M., A.P.P., CPCM, CMRP, director, materials management for Dana-Farber Cancer Institute, Inc. and Joe Centofante, vice president, academic and medical research for Fisher Scientific.
Changing a product as basic as a clear test tube can set back 10 years of research. While the presenters are from a medical research environment, the best practices of customer-supplier partnerships are applicable across industries.
What do customers expect from their suppliers? It means having a supplier partner at the end of the day, not just when you need them most. This means ongoing savings and productivity improvements where flexibility and transparency exist. Likewise, suppliers expect their customers to leverage suppliers’ assets, expertise and capabilities. The only way to do this is by communicating the needs of the business with the supplier. “Partnering can bring the biggest innovations and savings and solutions to the business,” says Centofante.
Obviously, one of the most important aspects of customer-supplier partnerships is cost savings. And reducing the total cost of ownership is the ideal method for reducing costs for both the supplier and customer. Whether it’s the supplier negotiating volume discounts with its supplier and passing along those savings to the customer or the customer engaging internal customers to buy-in to the supplier partnership for greater savings and efficiencies, significant process improvements can occur. “You should expect then to lower TCO well below the cost of the product,” says Centofante.
By distributing marketing collateral that communicates the win-wins and holding supplier open houses, internal customers can gain buy-in and realize that the partnership strategy is a unified effort. One that can work towards a number of different objectives whether it’s social responsibility, risk management or operations efficiencies.
With business benefits such as improved customer service, consolidation of spend, shared financial benefits and product standardization, organizations cannot afford to ignore such partnerships with their strategic suppliers. It can make a competitive difference in the marketplace.