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The Other End of the Supply Chain
Customer-supplier partnerships may sound good, but what is good for customers—fast delivery, low prices, large inventories—is a significant burden for suppliers. To meet these demands, suppliers must improve not only their own but also their customers' efficiency, rethinking how and when in the business process a customer generates an order, as well as how and when to fulfill it. Managing a customer's inventory, for example, gives suppliers better information about demand for their products, promotes better service, and reduces their inventory-carrying costs. Suppliers in a range of industries are taking such innovative approaches better to serve their customers and themselves.
The take-away: New IT and planning tools have promoted closer, but not always more committed, relationships between customers and suppliers. To serve customers better without absorbing onerous costs, suppliers must rethink their own and their customers' supply chains in order to insulate themselves from cost-cutting competitors.
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