Most of our clients over the years come to us when they have an overwhelming, obvious problem. But how do you know if your problem is big enough to require major changes on your part? For example, could you improve supply chain performance and create a more optimized supply chain by changing suppliers? Here’s a look at the idea of making change, and when it’s worthwhile to do so.
The Five Problems
Over the years at Phoenix Display International, we’ve simplified everything that could go wrong in your supply chain. Every risk or obstacle that can crop up will wind up in one of these five categories: obsolescence, delivery, quality, performance, or cost. Problems in these areas don’t always show up as an immediate crisis. They could appear first as nagging, minor hassles that escalate over time.
Just like when a personal relationship isn’t in crisis yet, but there are yellow flags or warning signs that things are headed in an unhealthy direction—you’re bickering more, talking less, or one of you is spending a lot of late nights at the office. There are warning signs in your supplier relationships, too. But, are the warning signs enough to justify you jumping ship and going to a new supplier? The answer, more often than not, is no (or at least not yet).
When To Change
Let’s look at the problem of delivery as an example, as it’s one of the most obvious places you’ll see problems brewing. Maybe you don’t get responses as you expect, or you don’t receive delivery confirmations. Perhaps there’s increasing variability in delivery times or missed commitments in terms of the delivery date.
These are warning signs, to be sure, but they’re not enough on their own to support you making such a significant change as switching suppliers. Instead, call your supplier about your concerns with delivery. If you have a good relationship, they should know exactly who you are and what you’re building. They should also be responsive to your situation and work with you to head off a crisis.
If they’re not, or if the delivery (or other) problems are getting worse, then it might be time to consider getting a new supplier. The right time to change suppliers for delivery or any of the five
problems is when the pain of staying is greater than the pain of changing. If you can work things out with your supplier or take action yourself to get the issue under control, I’d always encourage you to try that first. Changing requires a lot of time and work, and opens you up to new risks. So, if you decide to change, it needs to be because you’re facing very serious issues like the risk of going line-down due to the current issues.
One final note: If you do change, that’s a good time to consider the pricing of potential suppliers. But price alone is never a reason to change.
If you think your supply chain is mostly optimized, you can probably keep doing what you’re doing. But if you’re running into recurring issues and the pain of staying is becoming far too great, it might be time to change. We would love to help you do so, and take steps to improve supply chain performance.