When discussing strategic alliances in the procurement process, many people instinctively focus on "discounts for volume." While this may be part of a strategic alliance- it is smart to consolidate to fewer larger suppliers, but a productive strategic alliance involves more than a discount/volume formula for a given material being purchased.
If operational excellence is the objective, a key issue for procurement should be how suppliers working in a strategic alliance can help achieve excellence. A great example is to understand the production losses, operating, and maintenance costs associated with major critical equipment. Having production and maintenance personnel interact with strategic alliance vendors to establish a single supplier that will eliminate these losses based on mean time between failures of the critical equipment clearly goes beyond equipment pricing. This also has the advantage of putting suppliers on notice that the continuing need to buy spare parts for frequently failing equipment is no longer acceptable "business as normal."
Synchronous experts can help you align your operational excellence, procurement, and other operating initiatives. Give us a call, or send us an information request at www.SynchronousLLC.com
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