Infosys-Oracle Blog

This is a growing concept and is rife in the business world these days. Understanding the perspectives of suppliers about how products, processes, and costs can be reduced can deliver significant value to an organization. These kinds of discussions can be consummated if the organizations are receptive and are ready to determine how their performance stacks up against their best practice industry competitors, and identify areas and processes on which to focus resources and investments. If organizations believe that suppliers are an important stakeholder in the business, then the channels of communication open up really well and the ramifications of these discussions bear fruits. Suppliers are:
1. Likely to Best in Class in the products and services they offer
2. Due to close linkage with the industry, the suppliers are aware of the industry best practice and market trends.
3. Suppliers also practice KYC (Know Your Customer) and hence know the details of internal processes of our business.

Companies often make changes to designs, product requirements, packaging, supply chain, logistics without asking suppliers, the impact on their costs and hence ultimately prices. Take for instance a retailer in food and beverage industry that performs lot traceability of inventory, designs all its system process based on supplier's capability to provide SSCC compliant information that embeds pallet/case information, product and lot information etc. Unless carefully implemented, these programs can lead to increased system and business costs. The example above clearly inkles at the fact that supplier compliance with an organization/industry standard is a new project in itself.

Suppliers need to be nurtured and taken care of. Business economies today are not monopolistic; they are tending to be oligopolistic. Supplier would often allocate their best resources to their best customers. If they care for you, you need to care for them. There is a paradigm shift from KYC (Know Your Customer) to KYS (Know Your Customer). An AT Kearney report suggests that "Companies that engage their suppliers may find that a simple policy change or equipment adjustment could save millions of dollars- changes that would not have been considered had the company not reached out to, listened to, and shared ideas with key partners." Business world is really flattening.