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Enterprise Minnesota Magazine - September 2011
HELPING MANUFACTURERS GROW PROFITABLY
Finding Greater Value Inside Your Supply Chain
During next year’s State of Manufacturing™ poll (to be released in February 2012), Enterprise Minnesota plans to engage “a special focus group” of executives representing larger Minnesota OEM manufacturers. They will convene to discuss issues affecting their companies, and in particular, how they value a strong and dependable supply chain to fuel their ability to compete and grow.
Many top-notch small manufacturers today have taken steps to build strong relationships with their OEM suppliers to optimize their own ability to grow their businesses. These companies have identified the power of investing in themselves and their business relationships because they’ve tapped into the fact that their client OEMs also want to optimize their own supply chains.
During the past three years, many OEMs sought out companies that could not only build them the products they’re looking for, but that also could help them to improve upon the design and/or manufacturability of those products. These suppliers learned what is needed to become a strong supplying partner to their OEM customers.
If you are selling and marketing up the supply chain and connecting with your OEM customers at a strategic level, then you are creating value. But if your main relationship with your customer is with its purchasing department, which often is the case, the relationship is limited to a low piece-cost discussion. Value is created from attributes outside of cost, so it is essential to develop customer relationships beyond the traditional vendor/buyer model. Measurable examples that you are adding value could be working more closely with the customer to design and engineer their product for optimal performance, (by making it faster, stronger, smaller or more effective); collaborative problem solving and innovation; cost sharing development or warranty costs. Additionally, your ability to build in smaller quantities helps your customer optimize inventory. The stronger the relationship is with your customer, the more they will appreciate the total value of what you have to offer.
In our January 2012 executive focus group discussion, we hope to further define the kinds of knowledge manufacturers should be looking for to strengthen their relationships with their OEMs. We will be asking executives from well-known Minnesota OEMs with strong Minnesota supply bases about the criteria they look for when searching for new suppliers. Do they look for financial strength? Specific industry certifications? Experience within their specific industry? And the list goes on?
The goal of Enterprise Minnesota’s annual State of Manufacturing™ survey and focus groups is to reveal the issues and challenges that drive manufacturers’ ability to compete and thrive. This focus group is intended to provide candid perspectives from OEMs. And our hope is that those perspectives spark ideas among manufacturers about how they can become more valued suppliers. The information gathered will also be the headliner inside our State of Manufacturing™ book.
As we recruit participants for this focus group, we are keenly aware that some of our best ideas come from our readers. Who would you like to see on this panel? What questions would you pose to the group? I welcome you to send insights to me at bob.kill@enterpriseminnesota.org.
©2011, Enterprise Minnesota. All rights reserved.Reproduction encouraged after obtaining permission from EnterpriseMinnesota. Additional Magazines and reprints available for purchase.
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