Manufacturers urged to work with suppliers

Nation's Business, Feb, 1989 by Donald C. Bacon

Manufacturers Urged To Work With Suppliers Closer ties with small as well as large suppliers will pay dividends to a manufacturer seeking ways to produce better products and reduce costs, says Kevin O'Laughlin, senior consultant in logistics and management practices at Arthur D. Little Inc.

A "partnering" relationship maintained formally and informally with suppliers, O'Laughlin contends, can lead to higher standards of workmanship, better product design, lower logistics costs, and greater efficiency of production.

American manufacturers, he says, tend to rely on many suppliers and to think of purchases from suppliers only in terms of price.

O'Laughlin urges producers to cut back on the number of suppliers they use and to work more closely with those they retain.

Reducing the number of suppliers and raising the volume of purchases from each can substantially increase supplier interest in the design and development of better products, he says.

Among the examples cited by O'Laughlin was that of a manufacturer whose costs came down when a supplier engineered a generic part that replaced eight different parts produced by eight different suppliers.