But small and mid-sized manufacturers have reason to be optimistic in the face of this challenging climate. There is untapped growth potential in many of their toolbelts: the supply chain. Only 25% of manufacturers report that their relationships with suppliers are partnerships, meaning the vast majority of manufacturers are missing out on crucial opportunities.
Leveraging partners in your supply chain means gaining access to substantial resources you wouldn’t normally have the means to obtain— and it can transform the way you do business.
The suppliers and customers bookending your supply chain have the potential to become lucrative partners in your success. Consider the following assets and how they could impact your business, if only you had access:
Odds are that many of your suppliers and customers have one or more of these assets at their disposal and could share them with you for mutually beneficial outcomes.
These are just a few examples of how businesses in the supply chain can collaborate:
See the potential? It’s time to start thinking of your supply chain as potential partners.
Among manufacturers with less than $25 million in revenues, more than half have a “buy and sell” relationship with their suppliers—in other words, strictly transactional. Furthermore, most small and mid-sized manufacturers would agree that the majority of their time spent communicating with customers and suppliers revolves around resolving conflicts .
These are wasted opportunities. Instead, manufacturers should focus on finding suppliers and customers they trust and forging partnerships.
Many small and medium companies face similar obstacles when getting started. For example, they often hear from their suppliers that they’re too small to make an impact, but there’s a simple solution: Join a purchasing organization or buying consortium to gain buying power. Remember, just as smaller organizations face similar challenges, they also have similar benefits—larger companies, who aren’t as agile and can’t build or test a new product quickly, will often happily partner with a smaller plant to create a new product.
Get new partnerships off the ground with a few simple steps:
A word of caution: When you do start collaborating, protect your intellectual property (IP) from suppliers and customers, as they could back-integrate and diminish the value of your products and ideas. If you’re unsure, ask a patent attorney whether you should keep your IP a trade secret or publish it as a patent.
The sooner you make a practice of creating supply chain strategic partnerships, the sooner you’ll all see greater success.