Your suppliers may be losing you money. Here's why:

If you aren't exchanging accurate information with your suppliers, you may be facing more than increased inefficiencies. You may also experience variable pricing, an inability to track costs on specific parts and a greater likelihood of losing money.

Here's why: Manufacturers today rely heavily on suppliers to accelerate time-to-market, assist in new product development, build highly customized products and deliver key components - on budget and on time. Yet, instead of taking efforts to strengthen supplier relationships, many manufacturers leave these relationships to chance.

Rather than tracking design changes in real time, some manufacturers send complicated Excel spreadsheets whenever a change occurs. Rather than providing inventory visibility, others fax through last-minute PO requests that get lost or incorrectly entered. And rather than tapping suppliers for insight, there are other manufacturers who keep new ideas locked up inside the engineering department.

Stopping the bleeding

You may be hesitant to explore strategies for improving supplier collaboration because you're worried about cost. Yet, if you're not communicating effectively with your suppliers, you're already losing money. Some surprisingly cost-effective examples of collaboration strategies, shown below, may be the solution to improving your company's bottom-line:

• Product Lifecycle Management (PLM) - Oracle's solution can help you share product information with suppliers from initial concept and design through operation and maintenance. PLM lets you track costs against specific parts and make real-time changes to your CAD drawings.
• Collaboration Application Suite - One of Allstream's solutions, based on Microsoft technology, lets you exchange CAD information with suppliers no matter what system created it. It also lets you collaborate on designs, track document changes in real time and share information on forecasts, inventory levels, purchase orders and changes with suppliers.
• Inventory and Order Management - This type of system ensures suppliers have up-to-date inventory and PO information, so you know they can ship the right parts, to the right place, at the right time.

The strategies you choose to improve supplier collaboration will depend on your needs and budget. But rest assured: If the choice you make is to do nothing, you stand to suffer from slower turnarounds on sourcing, spiralling costs and lower productivity. Consider what might happen if you miss your next critical delivery. Without strong supplier collaboration, your business might be at risk.

To learn more about this topic, or share comments or questions, contact David Lukey at Allstream at david.lukey@mtsallstream.com. And don't forget to stay tuned for our next instalment where we discuss strategies for collaborating across distribution channels.