They are critical in enabling us to meet our goal to serve the customer or the end-user of energy. The reason for this partnership approach is that our suppliers help us to retain our competitive edge in the marketplace. With their cooperation, we are able to deliver goods of the right quality, on time.
In turn, we pay our suppliers on time and protect their margins. This ensures their continued growth and ability to invest in new technologies for six-sigma quality supplies. Our vision for our supply chain is, ‘Our supply chain will easily and consistently allow us to deliver our business strategy and gain a key competitive advantage while continuously improving ROCE’. This means we must continually improve our supplier base by adding new suppliers and training the existing ones in a truly collaborative way.
We have brought this belief to our engagement with our suppliers. Some examples follow.
Supplier meetings: We organise these meetings across all our plants regularly. In these meetings, we share our business plans with strategic suppliers, which enables them to align their operations with our delivery and quality requirements. At the request of some suppliers, as part of aligning our systems and processes to theirs, we work together to help them deliver six-sigma quality. We share internal improvement programmes with them, such as variability reduction, using Shainin and Bhote techniques, PPAP (production part approval process) and VMCI (vendor managed certified inventory).
Matching beliefs and behaviours: Creating an enduring relationship is very important to us. A shared belief system is critical to this. While selecting any supplier as our business partner, we ensure that our beliefs and behaviours match. We lay emphasis on trustworthiness, integrity and loyalty in the relationship to ensure a win-win situation.
To cement this relationship further, we work with them to deliver the quality we need. Training, both on-site and online, is provided as required. If we can train them, we do. If we feel we need to bring in outside trainers, we do that too. The critical piece of the puzzle is a shared value system.
Milk run concept: We outsource some of our production. The suppliers are usually in the vicinity of our plants and their factories are known as out-sourced production (OSP) sites. Material from these suppliers, who are many, is delivered to us very often. With the help of the Institute of Manufacturing, University of Cambridge, we are using the milk run concept to ensure deliveries with the lowest environmental impact. This innovative concept is basically taken from the milkmen who deliver milk to multiple customers at their doorstep. We transfer materials from multiple OSPs to our warehouse by collecting material from these sites in reusable packing cases, in a single round, thus saving fuel which in turn reduces greenhouse gas (GHG) emissions. Reusable packaging reduces the need for new packaging every time a delivery is made; this reduces waste and is a small but important step towards protection of the environment.
I-Supplier portal: This is an access-controlled, web-based tool, accessible on our website. It allows our suppliers to access their purchase orders and their account status and performance ratings, with respect to the quality of goods supplied and whether deliveries were on time or not.
Supplier roadshows: We invite our strategic suppliers and potential new ones to share their technological road maps with us. Our development engineers also participate in these events. This helps in many ways. Our suppliers inform us of any new products or technologies they are developing, and they let us know of any products that are being discontinued. Because the design teams are part of these discussions, it helps us to plan ahead, since all the information can be fed into component selection at the design stage.