Some time ago, during the process of visiting suppliers, I found that many business managers faced material management problems. In particular, some assembly type (substituting processing) factories are deeply troubled by suppliers’ timely delivery and quality problems. I have had the same experience in dealing with some complex prototyping projects.

So, today, the topic of “how to manage supplier effectively” is shared and discussed with everyone.

I think that to do a good job in supplier management, the first thing is to have a clear understanding of supplier management from the above, and the perception of suppliers should start with two “NO”.

     1. Do not treat supplier as suppliers

You may wondering:“Cindy , the sentence is much too bitter, if do not treat supplier as suppliers, what should I treat them as ? ”

I think we should use common alliance thought to see your supplier partners. They are part of us, one work shop, one department.

Many enterprises think they are customers, customers are gods, so suppliers must be under them and them requirement all in all. If you have similar thought like this, you will benefit from this post.

      2. Don’t take supplier materials as the key to reducing costs.

Of course, decreasing material costs is a key aspect to control factory cost, what I emphasis is beating a bargain within reasonable price is fine, excessive low price will cause troubles in after-services in return.  How to find the reasonable price? We must learn to do market research, different industries have different technology revolution every year, for example, boogie board first debut 8.5inch boogie writing board in 2015, the price around USD$200, now a lot of similar lcd writing tablet with upgrade function manufactured in China, wholesale price goes around USD$4-USD$40, some other goods fluctuate during different season such as festival gifts price, clothes price. Recently, as the fast developing of B to C, price tends to be more clear than ten years ago, some B to C platform such as Ebay, Aliabba, Ali express can be a good channel to know more about the markets.

After the two “NO” , let’s discuss the details thinking and solution to supplier management

  1. Detailed evaluation of suppliers

The core components, suppliers of key products, must be at least two spares for optimization. For example, many factories in Shenzhen are facing environmental problems. If your suppliers are environmentally friendly, security issues are turned off, and having two suppliers can avoid risks. Like TOMTOP, AOQI, Lighting, LITB, they have detailed complete evaluation system, for example, deliver time, qualification rate(pass rate), abnormal processing time rate, delivery period. These are important aspects to consider during selecting suppliers.

  1. After confirming partnership with your suppliers, we came to the first point again, work together as a alliance.

Help your suppliers, help suppliers grow up and improve their supplying abilities. Last month, I worked on urgent functional and appearance project CES demonstration. Facotory promised to send to my office direction on Friday morning, but I did  not see anything until noon.

This is normal situation in dealing with suppliers.

I called to them calmly for the first time, “Very sorry, Cindy, fire department is making an inspection, we have to delay to tomorrow ”

…called again restless.

“Very sorry, Cindy, my car break down one the way!”

Actually, goods are still assembling in factory producing line, I realized this is abnormal, so I drove to the factory work shop and communicate with production executive directly, originally, they are waiting the last step-speckle painting(spot coating), the hand painting process was delay. So I called to another coating painting partner in DongGuan asap and send the bucket parts to DongGuanworkshop in 2 hours, finally, all is ready and on schedule by Firday.

After this order, I request my partner to arrange a meeting to discuss the reason to this abnormal time delay and suggest them to store more spared supplier for key processing.  They are very happy with my suggestion and in order to thanks for my understanding for time delay, they will provide 2% discount in next order.

So, you can see how important it is for us to be a alliance!

From server and served to helper and supporter relationship, this is a optimum supply chain relationship, not a simple “give me your money” process.

  1. Details management to suppliers
    • Order process management every day
  • Quality management

Sample inspection before delivery, phone, video proof details before mass production, for some high precise requirement even need quality control for material.

  • Cost management

Learn more about process craft details, improve your design during sample tooling process, keep communicating with processing engineers, maybe a small change in your design can save a lot.

  • Contract spirit management

Reward the good doings, and punish the bad ones. Declare the items clear in contract. But for overseas trading, it is usually hard to appeal for compensation if one factory deceive customers or provide defective items.

If you have requirement in prototyping, manufacturing, low volume small run small batch production, please consider HITIONS, we provide from production, factory inspection, product quality control service with advantage in cost, time.

Best of luck !

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