THREE KEY STEPS FOR FINDING THE RIGHT PARTNERSHIPS FOR YOUR BUSINESS
By: Scott Bahr
Proper alignment—in any area of life—is no easy feat to achieve. When thinking about alignment between a company and its supply chain, finding that perfect fit can seem like mission impossible.
Add to this the logistical challenges we’re now facing in today’s current climate amid a surrounding swirl of issues directly tied to the global pandemic—and all the headaches and upheaval that COVID has brought to the stage—and the mission of procurement has become quite a predicament. Also, there’s no perfect, one-size-fits-all solution in this scenario.
But even though the best partnerships may not quite meet that mark of absolute “perfection” when it comes to strategic congruency, ensuring that your supply chain partnerships are aligned with your goals, values, and needs is indeed possible. However, achieving excellence in this area does require work, which includes diligent research, proper planning, and expert execution.
HOW TO FIND GOOD SUPPLIERS
Identifying and aligning your organization with reliable suppliers is challenging. It involves checking numerous boxes off a lengthy must-have list of expectations. For instance, your suppliers must be reliable (you need to be sure they can meet those shipping times!), affordable (are they willing to agree to—and stick within—your pricing parameters?), and maintain the highest quality standards (it is putting your brand on the line to forge your company with theirs—and their products—after all).
Finding good suppliers that meet all of these criteria was difficult enough before COVID hit, but now, with trade wars happening, materials and labor shortages, and much more arising to place a wrench in the works, finding and working with the best suppliers just got a whole lot stickier. Just ask Source Today, which penned an article on the issue.
SUPPLIER CHALLENGES IN 2022
The scarcity of raw materials explained in this article is just one example of what the Canadian mining industry faces due to the current pandemic. The difficulty it has caused has forced us all to get creative, stay flexible, and adapt when working to procure necessary goods. Another issue has been the shortage of qualified laborers who the mining industry depends heavily upon, including truck drivers to transport vital materials to and from mines. So, not only is it important that the partners you work with are on the same page about how to tackle these new hurdles that have cropped up due to COVID, but it is also vital that you are all aligned in your values and ultimate aims.
Achieving alignment in your partnerships means that you and your prospective partners agree on your priorities, goals, and the methods you will use as you strive to meet those goals together.
This alignment umbrella should include everything from core values to strategic efforts, performance, proximity, terms, conditions, and even share similar stances on diversity and inclusion, to name a few. For instance, Bit Service puts heavy emphasis on working with suppliers who produce high-performance products. We work in an industry where lost production time is extremely costly, and as such, the quality and performance of equipment, consumables, and wear products need to be beyond compare. At Bit Service, we mirror those needs with every supply chain decision we make.
We also take the alignment of partnerships seriously. We know that any misalignment in the areas mentioned above (or others) will affect the health and quality of our brand.
The harsh reality is that strategic misalignment is dangerous and poses a real threat, accompanied by consequences. These unwanted consequences can range from customer satisfaction issues, loss of revenue, unexpected expenses, damaged brand reputation, and more.
We know we can’t be alone in facing the challenge of choosing among a sea of hopeful partnerships as we move forward post-pandemic. For this reason, we have adopted a strategy that consists of three key steps we focus on when deciding who to work with.
1. DEFINE YOUR GOALS TO DETERMINE WHICH PARTNERS AND SUPPLIERS CAN HELP YOU REACH THEM
Any process of vetting potential partners begins by coming together and clarifying the exact goal(s) and defining (in methodic detail) the strategy that will be pursued to reach that goal.
2. PRIORITIZE YOUR STEPS OF ACTION TO ENSURE ALL PARTNERS AND SUPPLIERS STAY ON THE SAME PAGE
The second step is when to prioritize what actions will be taken within that strategy and how—and when—they will be taken. While requiring an investment of time, this type of planning will more than pay off by allowing all parties, especially management, to make decisions confidently, knowing everyone is in sync regarding what needs to happen next.
3. TRACKING METRICS TO MAKE YOUR PARTNERSHIPS MORE PROFITABLE
Keeping an eye on your metrics —mainly Key Performance Indicators (KPIs)—as you begin any partnership is pivotal, as this will help you see if your partnership is a profitable one and if you are successfully adopting the right supply chain strategies: ones that coincide with your business strategies and also reflect measurable movement toward your ultimate goals.
COMMON SUPPLIER KPIS
Procurement leaders look to improve their procurement process via aid from a wide array of procurement metrics that help them monitor, evaluate, manage, and improve the procurement function. This process includes tracking KPIs for other businesses as a clever way of vetting potential partners and suppliers. Some of the most important KPIs to take note of include: the number of suppliers, compliance rate, supplier quality rating, supplier availability, supplier defect rate, purchase order cycle time, vendor rejection rate and costs, and lead time.
HOW TO BE PROACTIVE WITH SUPPLIERS
One proactive measure we are currently taking at Bit Service is a quarterly modified strategic plan. We assess current practices and ensure that we’re staying up to date regarding what our end users, and even some of our vendors, are looking for in terms of alignment.
One thing that we are focused intently on right now in Saskatchewan is to make sure that our core values as a company are right on track with those with who we are choosing to partner. This means that we are proactively looking for business relationship partners that have Indigenous ownership and that promote—and practice—strong Indigenous supportive policies. The same thing goes for female-owned businesses and other underrepresented minorities. We are committed to equal representation and support for all, and we are dedicated to choosing only those partnerships that align with this and all of our other core principles and values.
To learn more about Bit Service’s core values or explore how we can help you on your journey, contact us for more information today.
This article was originally published June 9, 2021 but has been updated in 2022 with new industry news.