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The New Supply Chain Paradigm:
"Fittest may Survive"
BUT
"Collaborators will Excel"
by
Zubin Poonawalla
Old cliche goes- "Survival of the Fittest". In these volatile times many believe in this
& live by it. But Given today's uncertain business environment, I think mere survival
is not enough Survivors will be outcaste in no time!!

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Few months back when I was chatting with Mr.Aseem Srivastav- MD Kirloskar Ebara
& a dear friend, he illuminated me with his new Mantra for Kirloskar group: "Fittest
will Survive but Collaborators will Excel". It was so apt & inspiring, that I
extrapolated it for Modern day Supply Chain environment! Especially the Customer-
Supplier relationship.
"Collaboration" with Suppliers- the need of the hour.
In a typical Manufacturing company today, where increasingly a majority of the Value
of a product is created at the Supplier’s facility, Supply Chain Management has
become the critical focal point. The competitive advantage will belong to those
companies with most Effective & Efficient Supply Chains. Supplier co-operation &
support becomes critical to achieve this advantage.
However to gain trust & support from Suppliers in this environment would
necessitate Managers a complete paradigm shift of their outlook; especially towards
their suppliers. Their most important priority now remains to graduate current
company supplier relationship from Transactional to a Collaborative Partnership
.
Traditional means like target costing, hard negotiations, source replacement at will, &
confrontational attitude have now become a thing of the past. Modern doctrine

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dictates building a deeper relationship with suppliers based on mutual faith,
sustained problem solving, joint innovations & strategic alliances.
Idea is to make supplier's operations leaner, making them earn more profit, sales &
cash in time to come. This should enable the supplier to share the savings with his
customer & ultimately making him more competitive. Truly a win-win model.
How do you build such Collaborative Partnerships? A Scientific Framework:
Building Collaborative Partnerships is easier said than done. However, scientific
method exists to build such collaboration by observing companies like Toyota,
Honda, Boeing, etc. It is methodical & deeply committed approach in which
customer's supply chain team drives drastic improvements in Quality,
Productivity & Lead Times at the Supplier's facility.
It requires Managers take a Deep dive in understanding the Supplier's products,
business model, manufacturing operations & organizational culture & drive critical
improvements at supplier's shop floor as a starting point.
Even after this round of improvement, other opportunities remain to be tapped like:
supplier's manufacturing, procurement planning & logistics etc..
Managers to Gain & Apply NEW Supply Chain Knowledge:
Modern Supply Chain Manager will have to learn new techniques of shop floor
productivity improvement, designing & running effective milk run systems, Quality
improvement framework, new partnership development models & more.

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Just Shop-floor productivity improvement requires specific domain knowledge of Takt
time, single piece flow, creating dedicated lines, having one man manning multi-
machines, setup change reductions & much more.
Free today's Supply Chain Managers!!
To start on such strategic assignment, it is important that this Manager is off the
mundane & non-value added activities like chasing, firefighting, frequent
negotiations, etc.

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This would give him much needed time to build on this domain knowledge & invest
this learning in building an effective & deep supplier relationship.
A well designed consumption driven replenishment procurement system
addresses this need quite effectively.
I sincerely believe if companies & their managers today think beyond survival & aim
for excellence through collaboration, a revolution in Indian manufacturing ecosystem
is imminent. For this though the starting point is Managers gain this New Knowledge
& apply it for the benefit of their suppliers.