Partnering for Profits

Supply chain profitability linked to partner relationships.

CHAPEL HILL, N.C. -- November 8,2000 -- The world's most profitable supply chains revolve around process-based relationships that integrate suppliers throughout the product's lifecycle, according to a report from a best practices consulting firm.

The authors of the report, issued by Chapel Hill, North Carolina-based consulting firm Best Practices, assert that managers who overlook the "partner" aspect of a supply chain relationship consistently yield lower profit margins due to higher processing errors and supply costs.

"Companies need to realize the substantial amount of resources that can be saved through effective supply chain management," said Adam Bianchi, senior project leader. "One innovative company transferred so many functions to its suppliers that their purchasing executives can now spend 80 percent of their time on other activities."

The report, "Best Practices in Supply Chain Management and Partnerships," discusses how leading companies have improved supplier certification and partnership to cut lead times and inventory by more than 50 percent and boast 100 percent elimination of processing errors and paperwork. The study includes analysis of how benchmarked companies align with suppliers to meet supply chain improvement goals.

Drawing from in-depth interviews and research, the report compiles lessons learned, best practices and sample system review grade sheets from top companies spanning 31 industries. The report highlights supply chain management strategies and insights from more than 150 leading companies, including Federal Express, IBM, Wal-Mart and Proctor & Gamble.

Other areas identified as key drivers of supply chain management success include:

  • Partnership Identification and Selection - Assessing company needs and evaluating suppliers to align goals with a beneficial partnership.
  • Technology - Employing intranets, electronic data interchanges and management software to integrate supply chains and slash lead times.
  • Relationship Management - Fostering mutual understanding and communication with supplier to reduce errors and boost on-time deliveries.

The report can be purchased through Best Practices' Web site. An executive summary is also available.