Strong supply chain is vitally important to manufacturing [Newcastle Journal (England)]
(Newcastle Journal (England) Via Acquire Media NewsEdge) IN today's competitive business environment, becoming as cost- effective as possible, driving quality standards, and focusing on sustainability requires an unprecedented level of co-operation between manufacturers and suppliers.
Supply chain management should be regarded as a core capability and having a resilient, robust supply chain is vital to success.
There historically has been a number of challenges to achieve this; especially for businesses which have a complicated and seemingly disjointed collection of suppliers. To overcome this, bold, forwarding-thinking companies, such as Tharsus, are embracing an Original Equipment Design and Manufacture (OEDM) philosophy.
The OEDM model sharpens the entire product design and delivery process. This involves direct lines of communication between the design team, the manufacturing department and the suppliers, which cultivates an in-depth shared understanding and knowledge.
Such collaboration is essential to create a seamless process, embracing product research and development, procurement of parts, testing, and assembly through to a product being sold to a customer.
Traditionally, procurement has taken a combative approach, pitting supplier against supplier with decisions being made separately for each project and the benchmark concentrating on price, delivery and quality.
The big difference with OEDM is that the supplier is able to play an integral, more collective role rather than being held at arms' length. Their contribution to the process includes being able to provide a comprehensive understanding of what the end customer requires. OEDM is not an easy option. It takes time to embed and there can be challenges in getting suppliers to fully engage as the concept is such an unfamiliar one to most of them.
At Tharsus, we have found that adopting OEDM pays off. One of the main benefits is that it engenders a common goal with all of those involved being aware of customer requirements. OEDM also is transparent with all parties motivated by the desire to succeed.
No longer is the emphasis on competitor suppliers having to fight it out on price as the focus is which supply solution is best for the end product, thereby reducing risk and ensuring that all the necessary specifications are met. OEDM promotes collaboration, allowing suppliers not just to communicate vertically in the chain. For instance, if it is advantageous for the end customer to have supply agreements with key technology stakeholders in the supply chain then that will be put into practice.
It also leads to technology being driven harder because end customer requirements dominate every stage of the supply chain and the benefits of product improvement can be seen by all. For the UK's domestic supply chain and the country's economy as whole to grow and prosper, more companies need to apply the OEDM model as from our experience at Tharsus, it creates win-win business relationships.
By Brian Palmer, chief executive, Tharsus Group
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