Shared Value Chain Cost Reduction Through Innovative Supplier Relationships



ISM's 93rd Annual International Supply Management Conference

St. Louis, MO
May 2008

Author(s):

Jimmy Anklesaria FCA, LL.B., President and CEO, The Anklesaria Group, Inc.

World-class organizations make good use of strategic supplier relationships, and this session gave participants examples of how they can deliver value and achieve sustained competitive advantage to their own enterprises. Jimmy Anklesaria, president and CEO of Anklesaria Group, presented a general roadmap of effective cost management strategies, specific innovative strategies that have worked for a variety of top companies and their supply chain partners, as well as a list of key factors needed to establish and maintain relationships over time. Since dealing with changing factors like the economy, mergers, new personnel and leadership at supplier companies and other issues happens every day, Anklesaria also shared some ideas of how to approach these challenges.

A few key points include:

  • Develop a cost management strategy, and remember that this involves more than mere price reduction. To reduce costs, two phases of developing a strategy are negotiating costs and leveraging breakthrough ideas.

  • Always align your supply management organization's goals with the goals of the firm to make the most impact.

  • Develop a price monitoring process by determining company advantage against industry trends; benchmarking absolute competitiveness every so often; and using a combination of price tracking and cost modeling when negotiating contracts.

Overall, the session emphasized that in order to create and sustain long-term, valuable relationships with a supplier base, both companies need to put time, financial capital and people into their efforts.


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