Visiting the operations of your suppliers is more than just a courtesy activity. While they want to take the opportunity to show you the best of their operations, it is essential to plan this visit. Indeed, well planned, this visit can be extremely informative and valuable.
Planning
Planning the visit is important. Both for its conduct and for the questions to be addressed. I presented the overall approach and benefits in the article “Looking for Savings, Visit Your Suppliers.” Here are 25 questions that allow you to explore the key elements of your suppliers’ operations.
25 questions
Order taking
1. How are orders taken?
2. Who’s in charge?
Observation: Ask the person in charge to show you how they perform the order processing in addition to obtaining a status of the current orders (ideally yours).
Planning
3. How is the operations/production planning done?
4. Is it possible to see the global plan?
5. How do you manage your capacity?
Observation: Ask the person responsible to explain typical issues encountered.
Operations
6. Describe a typical working day for your employees?
7. Can we visit different workstations?
8. How do you make sure that no errors are made in the execution of the work?
Observation: Pay attention to workstations. Are they clean and orderly?
Quality
9. What are the quality controls in place?
10. Do you have a quality assurance policy?
11. Who is responsible for it?
Observation: Usually when the supplier confuses quality control and quality assurance, this is not a good sign.
Floor Layout
12. Why did you choose the current work layout?
13. How do you optimize travel/movement time?
Observation: Too many or long travel/movements are synonymous with unnecessary costs.
Storage
14. How are raw materials stored?
15. How do you determine inventory levels?
16. How is the “picking” made?
Observation: Do you pay for too many stocks or deficient practices?
Shipping
17. How are the shipping activities carried out?
18. Are there specific areas for shipping activities?
19. How are managed the carriers?
20. How are incomplete orders handled?
Observation: At this point, it is interesting to understand the cycle time of an order.
Common Areas and Rest Areas
21. What services are available to employees?
22. How is the cafeteria? The lockers? Etc.
Observation: You are trying to understand the attention given to employees (and the impact on your orders…)
Systems and Technologies
23. What systems and applications are in place?
24. What are your software license update policies?
25. What are the main challenges faced by employees in their use?
Observation: The use of several independent systems opens the door to errors in the transfer of data and information.
Of course, depending on the type of business you visit, it will be possible to adapt and develop your list of questions and items to be observed. However, one thing is sure; you will gain a better understanding of the activities of your suppliers. From that moment on, you will be able to initiate an extremely beneficial reflection.
Key Reflection
You will be able to understand how your own requirements and decisions affect your suppliers’ operations. You will be able to understand the impact on the costs of operations and obviously on the prices you pay.
Also, as I mentioned in “Looking for savings, visit your suppliers” , combine several visits of suppliers in the same line of business. You will be able to identify good practices in place in addition to evaluating potential improvements that your suppliers can make to their operations. This, having an impact on your paid prices, is a key benefit of the exercise.
Evolution in Supply Activities
The whole approach is part of the natural evolution of the role of Supply Management and Strategic Sourcing. We are far beyond negotiation and bidding. We are in the evaluation of operations, cost structures, and the best approaches to creating value for our respective companies. Strategic Sourcing thus integrates the principles of lean and optimization of operations.
So, when was the last time you visited your suppliers?
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