My first supplier road trip as a new buyer for a high-tech company was to tour the factories of two new and increasingly critical suppliers. It was the kind of trip awarded on The Price is Right. I traveled roundtrip with two senior managers, from Boston to San Francisco and Seattle, on non-stop flights with first-class upgrades. We stayed in five-star hotels and ate in the finest restaurants. We feasted on fresh salmon and small talk in a supplier’s executive dining room.
If this was the world of supplier visits, count me in and pass the Grey Poupon.
Reality quickly set in.
After a few more trips, I stopped benchmarking that first trip and retooled my expectations about visits to suppliers. A good trip? No missed flight connections, a mid-priced hotel that was not located at the end of the runway, an upgrade from a micro-compact rental car, a soft pretzel at the airport and my own bed at night.
Life as a procurement manager on-the-go wasn’t always glamorous, but I found visits the most effective way to manage my supply base. With in person visits, I could deliver news (bad and good) face to face, get to know and thank the employees who built my products, solve problems and deepen the relationship. The suppliers appreciated that effort – it showed them just how important they were. They loved showing off their facilities and lamented that most customers never visited, even those in close proximity.
Potential suppliers: The best supplier evaluation tools include using your five senses. There is no magic replacement for visiting a potential supplier and meeting with management and key employees, touring the facility, conducting appropriate operational and financial audits and learning more about the vendor’s business. It is also an excellent time to discuss your business objectives, identify areas of risk and see if there is the necessary alignment to move the relationship forward.
Key suppliers: A quarterly, semi-annual or annual "well-baby" visit to important suppliers are worthwhile. Contract reviews, updates to technology roadmaps, supply chain risk reviews and the sharing of forecasts are all important agenda items, as are facility tours, especially when you can see your purchase orders come alive on the manufacturing floor or staged for shipment.
Suppliers with performance issues: In this case, a site visit is even more critical. Manufacturing, engineering, quality, administrative and communication issues can be identified and resolved on a real-time basis. Visits create a sense of urgency that cannot easily be conveyed on the phone or by email.
I worked for two Fortune 500 companies that included mandatory supplier visits as part of their supply chain management strategy. Expectations included visiting and approving all critical suppliers, maintaining ongoing relationships with major suppliers and working directly with poor performing suppliers. Both organizations provided corporate travel cards and related expense accounts to facilitate travel. One even leased two cars dedicated for supplier visits.
I remember a couple of months when I needed to do a half dozen bi-weekly onsite schedule reviews of a company located 350 miles from my desk. My alarm went off at 3 AM to catch a 6 AM flight, then an 8 AM rental car reservation and a 9:30 AM meeting with the general manager. At 11 AM I was back on the road retracing my steps and reporting my findings to senior management. The delivery situation was resolved, but I wasn’t sure if my visits helped, or perhaps were punishment for selecting this particular supplier.
[Suppliers] loved showing off their facilities and lamented that most customers never visited, even those in close proximity.
Rich Weissman
Supply Chain Dive
A positive outcome of supplier visits is in building internal relationships supporting the supply management process. I traveled with colleagues from engineering, quality assurance, research and development, senior management, finance and other functional departments. These subject matter experts often solved design problems, improved communications, provided support and demonstrated an overall commitment to the supplier.
One gets to know travel companions well, and often personally. These colleagues became allies in working with suppliers.
Sometimes I had an ulterior motive for inviting colleagues to visit a supplier. It was a window of opportunity to explain the intricacies of supply management and maybe change their skeptical view of a supplier.
Such was the case with a quality assurance inspector, happy to pounce on any supplier defect, who met his supplier counterpart, opened up lines of communication and a new found appreciation for the challenges of our quality rating system. Or the finance manager, who thought suppliers were charging too much, now with a better understanding of the cost of raw materials and the impact of schedule changes on a company’s cash flow. And the engineer who discovered mistakes on blueprints and committed to fixing them, even incorporating the supplier’s recommendation on how to better design the part.
While digital imaging of defects and videos of manufacturing problems can indeed help in quickly solving problems, it is not a replacement for a visit to a factory.
Rich Weissman
Supply Chain Dive
There seem to be even fewer road warriors these days. Some supply management professionals tell me that staffing, workload and financial concerns are restricting the amount of travel they can do, limiting supplier visits to emergencies only. Others rely on data analytics rather than site visits and substitute online conferencing tools and digital imaging for that up-close experience.
While digital imaging of defects and videos of manufacturing problems can indeed help in quickly solving problems, it is not a replacement for a visit to a factory.
For me, seeing and hearing machinery in action, touching finished goods ready to ship, smelling cutting oil and lubricant and tasting marginal conference room coffee were a good use of all of my senses.
About the Author
Rich Weissman is a practitioner turned college professor, Rich Weissman had more than
twenty-five years of practical experience in all aspects of supply chain management. He is
past president of the Institute for Supply Management –Greater Boston and the recipient of
the Harry J. Graham Memorial Award, the highest honor bestowed by the Association. He
writes and speaks extensively on issues impacting the global supply chain.
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