What will be the characteristics of the ideal supplier in the year 2000? I first thought about this a few years ago when I began writing this column. Interestingly enough, my vision of this ideal supplier has not changed. So now that the next millennium is literally around the corner, I need not try to predict these characteristics, but can simply speak from observation and experience.
The successful Supplier 2000 is a vital link in a customer's supply chain, consistently providing extra services that customers have grown to depend on. Without these extra services, Supplier 2000's customers realize they would not be as effective in producing their goods and services. The relationship between Supplier 2000 and its customers is a mutual dependence that is not easily severed. Customers thrive on the relationship they have with Supplier 2000 because they do not have the time, or resources, to search for new suppliers. This does not mean that Supplier 2000 has its customers over a barrel. Very few suppliers can ever claim a totally captive audience, at least not for any significant length of time, because competitors will discover ways to offer similar products and services. Therefore, Supplier 2000 must work hard to keep the customer-supplier relationship healthy and mutually prosperous.
Supplier 2000 flourishes by finding new ways to provide total, or turnkey solutions to its customers. Supplier 2000 works with its customers on initial design concepts and design specifications, prototype and production quantity parts (assuring that products are fit for their intended purpose), and on short delivery schedules.
Customers rely on Supplier 2000 for design concepts and development of specifications because they recognize Supplier 2000's expertise in these key areas. As more companies incorporate concurrent engineering concepts in their organizations, suppliers are frequently asked to serve on new product design teams. This is a great opportunity for suppliers to positively influence new product designs and build credibility with a customer. With ever-decreasing product life cycles, companies are under greater pressure to design products right the first time. Supplier 2000's valuable input early in the design process will lead to better designs and fewer changes down the road.
Supplier 2000 will continue to provide prototype and production quantity parts to its customers. Speed will be a critical requirement for prototypes. Customers need functional prototypes so that form, fit, and function can be evaluated and necessary modifications made prior to large volume production. Supplier 2000 may need access to rapid prototyping tech-nologies, such as Stereolithography (SLA), or selective laser sintering (SLS), or at least be flexible enough to machine or fabricate prototype parts so that customers can quickly conduct these evaluations. Once prototypes are approved, production quantity orders will face in- creasing pressure for cost containment. Cost containment or even cost reduction clauses are already a key component in many long-term contracts. This situation forces Supplier 2000 to utilize the most productive manufacturing processes.
Suppliers have always been responsible to assure their products are fit for use. However, Supplier 2000 is such a key link in the customer's supply chain that it may have a better understanding of a product's "intended use" and is expected to recognize potential problems. Providing short delivery schedules will continue to be a difficult assignment. Recognizing the costs associated with stocking the right quantities of the right parts, many suppliers have implemented lean manufacturing principles that include reduced machine setup times, quick-change tooling and fixtures, flexible machine tools, CAD/CAM software that is compatible with their customers' systems, and cross-trained work teams.
The future for Supplier 2000 is mixed. It is bright for those who can fulfill the needs of customers because they can look forward to long-term, mutually rewarding relationships. It may be bleak for those suppliers who cannot react to the ever-changing demands of customers, and customers need more from their suppliers because their customers are demanding more from them. Supplier 2000 must recognize this and be proactive in its approach to the most important demand of all—customer satisfaction.