Supply chain customers probably don’t differ that much from anyone else’s. In fact, when we are the customer we too typically demand more for less, and at some point the whole relationship tends to go pop. We only need to look at recent history to see the impact of this relationship style; we’ve seen what has happened to City Link and it makes one wonder how many other companies are teetering on the edge.
It’s not a new state of affairs either. The fashionable word from a decade ago was ‘partner’, a metaphor for ‘please can you stand still whilst I kick you in the nuts’. But I think we’re moving away from that as an industry. While it’s true we all want to get more for less – a natural part of being human – we’re working on how we can evolve and move past it. We need to think about ‘collaboration’ and enthuse to our customers, colleagues and even competitors about how we might do it. The competitor angle is especially interesting. To a large degree they do what you do so there must be synergies where resources and costs can be shared. To take an example, we sub out our Director of Security to our main competitor!
The sharing of our security guy is a small example of what can be achieved through collaboration. But this type of exchange and benefit can only be measured in single type digits – it’s not going to change your fortunes.
We’re supply chain experts with specific knowledge of Field Support. During the last eleven years we’ve learnt where the wastage is; that obsolescence costs our customers millions as they write off stock; how critical it is that a part gets to the right engineer at the right time; how the market has commoditised the spare parts suppliers and how fragile some of the relationships have become as a result of not just this commoditisation but the way ‘partners’ treat each other.
To change this situation we are getting customers and suppliers to think in a different way. If only a few do then you can begin to affect change and those not prepared to will be competitively disadvantaged, become late adopters and potentially fade away.
This has led us to create a virtual warehouse. Remember JIT (Just In Time)? In a nutshell that’s what it is, but with a key difference; the use of technology is now a given and we all have access to vast amounts of information at our fingertips. This information would have previously taken days of detailed analysis to yield results but instead it is seconds, allowing us to make informed decisions.
This technology allows all parties to collaborate, giving a thorough understanding of the supply chain pinch points and problems we’re trying to fix. A few simple changes in process and mindset and you now have suppliers offering a sale or return model that prevents the build up of stock, reducing the number of parts that become obsolete. We deliver directly from the supplier to the engineer, meaning no more expensive warehouse operations. Our customers are prepared to pay several points more for this system as they recognise the value this flexibility. The benefit to us is that we get more critical mass going through our network, helping us to stay competitive and drive further refinements in our supply chain evolution.
Mark Garritt, Managing Director, ByBox Field Support
