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20 Questions to ask a potential SCM partner

Evaluating a potential supply chain partner

Outsourcing your supply chain-whether you're seeking support for a single component or a complete, end-to-end solution-is no small undertaking. Given the time and resources the transition will take, and the potentially devastating impacts to your business if the project goes wrong, it's critical to find a partner who is experienced, communicative, and meshes well with your existing team.

20-Questions-to-ask-a-potential-SCM-partne

Why do OEMs choose to outsource manufacturing and supply chain management?

The practice of outsourcing manufacturing and supply management is widespread among OEMs. This strategic approach is adopted under the premise that it will allow OEMs to concentrate on product and service development, marketing, and sales so they maximize value creation. Outsourcing manufacturing and supply management brings relief on OEMs' capital expenditures and can substantially and positively impact costs, time to market and innovation. Please refer to our website for a complete list of benefits a supply chain business partner can bring.

The need for end-to-end supply chain partners

From our 50 years of experience, we've learned that customers come to us for one of three reasons:

  • They want to outsource manufacturing to reap the benefits of cost reduction, expedited time to market, and innovation but they don't have the supplier relationships. Often this is a combination of constraints: they need a custom part that is not core to their engineering manufacturing expertise, they don't know how to manufacture the product themselves, or they need to lower their cost to be competitive.
  • They want to reduce exposure on a specific part or product. By increasing redundancy (second sourcing or multi-souring), they want to hedge against the possibility of a disruption either caused by external factors or the complacency of a single supplier. They need cost-effective safety stocks, reduced inventory levels, and a lower overall cost of ownership.
  • They can't afford to manage this part or product on they own, nor can they afford not to manage it. In many instances, supply chains have become so complex and unwieldy that just maintaining them is consuming a significant and inefficient amount of resources. They need to decrease their risk exposure, remove complexity, and seize more opportunities to reduce costs.

Outsourcing manufacturing and supply chain management as a solution

The right SCM partner empowers you to effectively source globally, reduce cycle times, and improve operational efficiencies. You also need the assurance that SCM outsourcing doesn’t involve sacrifices in quality, cohesion, institutional knowledge, and growth potential.

This is even more critical when your components, parts, or finished products are complex, custom-engineered, and built to precise specs. You need a true SCM partner who will understand and adhere to your critical quality requirements without requiring more of your time, while also reducing your total cost of ownership.

More OEMs are pushing on both ends of the traditional value chain of simply outsourcing manufacturing. On the front end, they’re looking for engineering support-not just for DFM, but helping them through the initial design, development of products, and performance feasibility testing stages of the product. A partner with extensive and varied experience brings the expertise needed to support innovation for unique product manufacturing challenges. On the back end, OEMs want partners who are experts in and can provide outsourced support for purchase orders, supplier communications, order tracking, kit assembly, packaging, logistics support, warehousing, and integration into their existing supply chains.

20 questions to ask a potential SCM partner

Below are 20 supply chain questions to ask potential partners to ensure their capabilities and processes will properly support your organization's personnel and its procurement and supply chain orchestration:

Scope and experience

1. How long have you been in business, and what is your track record managing for organizations like mine?

2. What are your capabilities related to design engineering and manufacturing my custom part/within my industry?

3. What is your approach to managing my legacy suppliers/vendors/3PLs? (if applicable)

4. How will you support the compliance or regulatory requirements that apply to my products? (if applicable)

5. What value-add services do you provide that might take our partnership to the next level?

Service consistency and quality

6. Who will be my point of contact, and what is their background/experience? What is the background/experience of the team supporting them?

7. What is your approach to communication with clients? What reports/information will you regularly share, and how often will you share them?

8. Where are your team members located? Can they help my organization overcome any time zone and/or cultural challenges that might arise?

9. What key performance indicators will you follow-both across the industry and specific to our business-to ensure our partnership is successful? How do we establish and ensure ongoing accountability?

Risk mitigation

10. What quality assurance processes do your company (and its suppliers) have in place? Do you maintain ISO 9001 certification?

11. How will you protect my company from unexpected supply chain disruptions or uncertainty?

12. What support mechanisms do you have in place to ensure our operations and logistics run smoothly?

13. What are your financial terms related to manufacturing and warehousing, and how can they protect my organization in case of unexpected circumstances?

14. What measures will you put in place to protect my company's intellectual property?

Technology

15. What type of ERP do you use, and what kind of visibility will it give me?

16. What smart manufacturing capabilities do you/your suppliers utilize, and how might they benefit my products?

17. What specialized or cutting-edge equipment do you have access to that might simplify or advance my manufacturing?

Support during the transition

18. What is your process for onboarding clients? How do you ensure the transition is smooth and all stages are appropriately scoped and supported?

19. What is your approach to communicating and resolving any emerging issues?

20. Is there a specific timeline or benchmarks that you recommend we establish to ensure our partnership is successful?

Engage in conversations with your potential SCM partners.

You can tell a lot about a potential partner through a few initial conversations. Are they transparent and open? Do they answer your questions confidently and knowledgeably? Do they have the capabilities to take on-and potentially improve-your manufacturing and supply chain needs? Are they comfortable being held accountable? Are you comfortable with their communication and approach? If you can confidently reply "yes" to all these questions, you may just have found the partner that will take your supply chain to the next level.

Why Nelson Miller Group as an SCM partner?

Producing the parts and components you need on time and on budget isn’t always as easy as it seems, especially if your team is responsible for managing every aspect of your engineering, manufacturing, and supply chain for your business internally. NMG has global reach and offices in the USA and Asia. We aren’t constrained by a single source, a line card, or a factory. We bring superior value via our expertise and experience in design and engineering, end-to-end supply chain management, and the orchestration of services for a smooth and reliable program. We're thrilled to answer all your questions as you work to select the right partner for your outsourced manufacturing and supply chain management needs.

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NMG has more than 85 years of experience partnering with organizations to bring their industrial, IoT, lighting, medical, telecommunications, consumer, and aerospace products to life. We solve your most complex challenges in engineering design, manufacturing, and supply chain management.