Anna Warren, Supply Chain Solutions Manager, says many companies are keen to explore the possibility of sourcing more products or components from lower cost countries but are intimidated by the complexities of managing the vendors supplying those products.
“The benefits of a lower unit price are quickly lost if the suppliers/vendors do not meet the specifications or the deadlines,” she explains. “You can, of course, impose penalties if problems arise, but that doesn’t keep your production line running or your own customers happy.”
Instead of handing them a thick Supplier Manual – often in a foreign language – or threatening a range of penalties, it is far better, she asserts, to work closely with your suppliers to prevent potential problems.
Some companies use dozens if not hundreds of suppliers in regions such as Asia, making visiting each one virtually impossible.
To solve this problem, Virtualized Logistics works with its customers to run regular vendor workshops – using its local staff, who understand both that individual customer’s needs and the supply chain process, as well as the local culture.
The presentations cover everything from the product itself to packaging and packing to labeling and Customs requirements.
“As we know, these elements can also change quite regularly, or quickly, so the workshops are especially useful when regulations or customer requirements change during the course of a contract,” says Ms Warren.
The workshops also help the suppliers understand how changing even one seemingly small element of a product, such as packaging, can impact through the rest of the supply chain. “The size or shape will affect how it is packed and stored, the material might be subject to different regulations or simply might be more easily damaged.”
Virtualized Logistics supports change management in all its forms, including company acquisitions where their supply chain management software needs to be integrated or changed for vendors as well as customers.
“Global sourcing has huge potential benefits for companies but needs careful management to ensure the maximum benefits accrue,” says Ms Warren. “And, despite all the sophisticated software, we need to remember that, in the end, it is about people doing things.
“Building positive relationships at an individual level, through events such as these workshops, as well as regular visits by local Virtualized Logistics staff to larger suppliers, helps ensure the concept of globalisation really works.”