In July 2020, McKinsey Quarterly published an article titled ‘Taking supplier collaboration to the Next Level’. For us at ComplianceQuest, there were three aspects mentioned in the post that stood out prominently:
- Companies with a mature procurement function always build a two-way, collaborative relationship with their suppliers. They know how to “unlock value” for both the buyer and the supplier.
- The second major takeaway from the study was that companies with a collaborative mindset towards suppliers see the impact in terms of financials – higher revenue growth and lower operational costs.
- The report also touched upon how cross-functional engagement between buyer and supplier was critical. In other words, there must be true collaboration wherein multiple departments or functions engage with their counterparts on both sides.
Fundamentally, the study suggested that a deeper strategic alignment coupled with trust and transparency between the buyer and suppliers is crucial for a win-win relationship.
At ComplianceQuest, we recently conducted a survey to understand the current state of how manufacturers were approaching the digital transformation of supplier quality processes. Interestingly, the results from our survey are in line with the findings from the McKinsey study.
Most companies are embarking on a 1-year to 3-year digital transformation roadmap, with the goal of building more mature, robust, and data-driven supplier quality processes. While supplier quality is only one specific aspect of supplier collaboration, it is probably the single most important one when it comes to building a deeper strategic relationship.
Based on the survey, we also published a Supplier Quality Maturity Benchmark Report, that offers a detailed perspective of how an enterprise can improve its supplier quality maturity and accelerate digital transformation to drive business value.
To summarize some of these findings, we requested Nikki Willett, VP of Industry Solutions (EQMS) at ComplianceQuest, to present a short webinar, making it easier for supply chain leaders to gather key insights.
Access the webinar here:
Broadly, any supplier quality digital transformation effort will revolve around three pillars: people, process, and product. And, next-generation, technology-led digital transformation is a no-brainer to building a “continuously improving” supplier quality process.
Based on the inputs we received in our survey, we categorized the companies into three segments:
- Laggards: Companies that are short-term, reactive and compliance-focused
- Progressive: Companies that are proactive with some enterprise processes standardized and periodic supplier quality improvement initiatives using digital technologies
- Leaders: Enterprises with global standardization, best practices, next-generation technology, and a deep focus on continuous improvement
The leaders in supplier quality were deeply focused on ensuring a 360-degree view of their suppliers. Therefore, even when an event like the pandemic struck, thanks to data visibility, they were able to mitigate the disruption by quickly identifying suppliers that needed re-qualification and re-onboarding. And they learnt how to be more resilient in a future disruption.
In the webinar, we share more findings from the survey and key best practices that quality leaders must embrace to transform their supplier quality efforts. Additionally, we also touch upon the benefit of having your suppliers integrated into your EQMS.
Watch the webinar here: