The current quality mantra is to reduce the supplier base.
The logic is fewer suppliers' costs less to monitor. Everyone wants to save money. The QA staff can
watch a small number of suppliers more intensely than a larger base. With that
logic why not take it to its logical conclusion- Sole source for everything?
Most would agree that’s risky having one supplier. So a small number is their
answer to sole source argument. The problem with this limited base is companies
are missing where most innovation comes from- The small innovative supplier.
Why the small supplier? The small
companies must come up with new and innovative products to compete and grow. Large
companies have less incentive to innovate for for the following reasons: they are already big
and established. The large company asks why cannibalize your own products?-- we
are making money. Large companies get sole source mentality -we are big, safe
with these products; so don't change anything. Further, large bureaucratic
organizations stifle creative outside the box thinking. Could innovation occur
in an ISO-Management style? Do you have an ISO approved procedure for that new
thing you are working on? Could Edison have tested 4000 elements if he had to
write a procedure for each one? Creative
people are usually not fond of procedures and additional paperwork. This is one of the major reason creative
people start companies-- So they can innovate and create.
Ask yourself if you belong to an innovative company? Are the terms "process over product" used at your
company? "We don't care what you build just document it." Want to doom
your company? Limit the number of
small innovative suppliers. The result will be your product designs will look
just like your competitors. When that happens the company margins will shrink.
Why pay more for a me-to-product? Look at large struggling companies such as HP
and Dell my guess is every year they dump suppliers. The iPod came from a meeting with Job's and a supplier that had a crazy small disk drive. Find a large company that
has limited its supplier base and I will show you one that slow to
innovate. The next problem the large company
faces is a smaller innovative companies coming up to eat their market share. So
the large company gets it from both ends. Lower margins for existing products
and increasing smaller market share because of innovative competitors. Does that sound familiar at several large
companies?
www.Finditjoe.com
No comments:
Post a Comment