Procurement and Your Suppliers

“Procurement and Your Suppliers” Hosted by Supply & Demand Chain Executive on Wednesday, August 19, 2015

Responses from the Q&A Portion of the Broadcast This information has been provided by the webinar presenter: Gary Barraco, Amber Road

1. Management continuously asks for more year over year savings, but it comes to a point where you scraped the bottom of the barrel and piece price is becoming hard to achieve for PPV. Any techniques for achieving PPV while also benefiting both parties? It is imperative that C-level executives by into a culture of supplier management relationships that are true "partnerships". This means realizing that every party is in business to make a profit. Supplier relationships need to focus on mutual value for every party with the vision of growing together.

2. What is the best strategy for convincing senior business unit leadership of the importance of working with strategic partners rather than 'against' suppliers in adversarial price battles? Validating "investments" in a supplier relationship program that is fair and equitable for all parties is a challenge. There are case studies in every industry where organizations have made the leap and elected the option to work with select suppliers that afford greater benefit (quality products, produced ethically, that are compliant and consistently fair priced). Citing these examples would be the first step.

3. In terms of supply chain risk, how does China's current economic uncertainty impact the supply chain and where do you believe China's economy will go in the next six months? Since the webinar broadcast, we have seen the global impact on markets. The uncertainty will play into how we continue to source so heavily in China, but also places additional emphasis on the need for supplier diversification into other countries and regions.

4. Do you believe a sourcing strategy will or should "treat" with same indicators and processes (diligence) very small, small, medium, local, multinational global suppliers? We believe that the due diligence and prequalification process should be tailored to take into account supplier size and risk exposure. When we partner with clients to manage their supplier prequalification, we help them segment their supply chain based upon risk and then tailor the diligence process appropriately for each risk level.

1 5. Please provide an example of what tier 2 or tier 3 visibility would be? What are some ideas a company should ask their supply base in regards to this visibility? Visibility into raw material suppliers' operation, capabilities, capacity, sub-suppliers, product composition and testing, and compliance is important to maintain risk levels for every party in the supply chain network. Technology tools, coupled with standardized surveys, questionnaires, audits and other documentation would enable visibility.

To learn more about Amber Road’s procurement capabilities, please visit our website. For more key strategies on how to protect your supply chain against costly delays download our white paper, How Collaboration Reduces Your Global Supplier Risks.