Transforming Your Supply Chain – A Simple means to Increase Performance

Many of my clients work with, and depend on effective supply chains. In most cases they are not happy with their supply chain performance. At best their supply chains are inconsistent with some good and many bad results. They are also not predictable. In researching this subject I came across a definition of a tiered supply chain. This definition, on the Web, stated that the ‘most important’ person in the supply chain is Tier 1. The Tier 1 supper is the one closest to the customer and is usually the one that is integrating the largest parts of the products being supplied. They are at the top of the chain. Herein lies the crux of the issue. I think the most important member of the chain is the lowest member. They are usually the smallest least sophisticated member. It is they, however. who control the performance of the chain. Tier one suppliers usually use negative incentives down the chain to force performance. This is a fear based strategy and requires constant threats and intervention. It never solves the issue. What is needed is a new vision of the chain and its lowest common denominator or weakest link. It is here that the supply chain can be transformed forever. In working with these suppliers I feel that a different pricing model and structure can solve the performance issue on a sustainable basis and form a win/win solution for all parties. Reframed this issue can be solved forever but maintain the current strategies and you will create endless cycles of performance shortfalls.

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