Supply Chain Solutions No.46 – Explain the Development and Production Process to know gaps in the Vendor Process
There are three core business models sourcing products. Buying organisations need to define what their business model is and how their process operates, never expect the vendor will understand your business model and process.
Types of Product Buying Models;
- Buy of the Shelve Product – No development, branding and packaging changes, PPS go to Production.
- Single Proto Sample – Develop Prototype, PPS go to Production.
- Salesman Samples – Develop Prototype, Salesman Sample, PPS go to Production.
- Within the above three options, one off production and replenishment.
The three business models have a different level of process, model one been the simplest and model three been the most complicated with additional process and resources required. Where a vendor is manufacturing for model one or two, the vendor may not have the resources to achieve requirements for model three.
The buying organisation needs to explain the development and production phase; each buying organisation will have a different requirement across the critical path and deliverables, the process needs to be clearly defined.
Describe the business process and expected deliverables to the vendor and ascertain what the gaps are so corrective action can be put in place and or additional support allocate through the initial stages of the relationship.
Mutually through this process, both parties will learn about the vendor’s process versus the buyers need and the gaps that exist, it is then a decision if corrective action is engaged to rectify and support these shortcomings or if it is in the either businesses interest to continue.
ID Global Concepts are experts in supply chain management. We add value to your supply chain through consultancy or management contract to ensure the business has the best practice systems that are the right fit for your business, customer and meet your value expectations.