Functional Supplier Consortiums

Author(s):

Gerry Murak
Gerry Murak, Murak & Associates, LLC, 1321 Millersport Hwy. Ste. 202, Williamsville, NY 14221, 716/631-0253.

83rd Annual International Conference Proceedings - 1998 

Abstract. Bringing suppliers together for a meeting to form a consortium can be a challenge, especially when several are competitors. Practical steps can be taken to individually and collectively improve supplier performance with a sense of urgency. Building a common language is an essential first step. Another key element is to simplify and positively share baseline data across the supplier base. Based on these practical foundations, each supplier as well as the host company can take immediate initiatives to determine their internal barriers. These problems can then be turned into prioritized opportunities for action with timelines and ownership, that lead to dramatic results.

The Opportunity. Participants will be able to immediately experience common barriers which inhibit the successful formation of supplier consortiums. Utilizing this gained perspective, the participants will then hear the details of a consortium which consisted of competitors, that resulted in the growth and profitability of all suppliers, as well as the host company.

The case study will reveal the specific techniques utilized with five suppliers and a host company. The purpose of their consortium was to help the host company to face the challenges of opening new global markets. More specifically, each company needed to improve quality, on time deliveries, reduce set up times, increase efficiencies and reduce overall costs at each manufacturing site. The results were to be measurable and quantifiable. Each company had specific costs savings from their involvement in the consortium. The six companies were provided with the means to continue their progress and operate more efficiently. Each company made significant progress in implementing these changes as well as improving the lines of communication to assure continuous improvement beyond the scope of the consortium. Four of the six companies have since achieved record sales and profit as well as increasing their employment to support their added volumes.

Objectives. In a variety of hands-on activities, the participants will be interacting as an entire group as well as in a small groups, pairs, and individually. Through each of these various techniques, participants will gain the following deliverables:

1. Techniques for developing a common language and functional baseline data.
2. Identifying current "barriers to change" initiatives which can inhibit successful supplier consortiums.
3. Forming a conference network of additional resources which have common experiences and goals.
4. How to tap the reservoir of organizational energy which will catapult the progress in forming such initiatives with a sense of urgency.
5. Incorporating these techniques as well as a shared case study, participants will develop specific action plans and time line for immediate application when they return to their organizations.
6. Developing feed-back mechanisms which allow participants to benchmark their progress with individuals in other organizations who are involved in similar initiatives.

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