By Alex Berryman
After the supply chain disruptions of COVID-19, brands are realizing collaboration with their manufacturers is no longer just a ‘nice to have’ but a necessity.
Simply put, collaboration is two businesses working together to plan and execute business operations. When done well both brands and suppliers expand product offerings, streamline fulfillment processes, and increase profit margins; creating more traceability and agility in their supply chain.
In this blog, we will outline 3 steps in which a brand and manufacturer can build a collaborative relationship. However, while we are focusing on the brand/manufacturer relationship, these principles can be applied to relationships throughout multiple levels of the supply chain.
Collaboration: A Case Study
At Purnaa, we work with many fantastic brands that share our vision for quality manufacturing that creates a social impact. One such company has taken their production to the next level by pursuing a highly collaborative relationship from the beginning.
Early on, the brand invested in a relationship with Purnaa, visiting our facilities and relaying key information about their long term goals and capacity. At that time, they needed a greater quantity of products than we were able to regularly produce. Because the brand set clear expectations and was willing to invest in training, Purnaa was able to develop a production process to increase capacity to meet their needs and do so at a much higher quality level than their previous manufacturer.
A second key issue was identified: the customer needed their products delivered in small, flexible batches, but sourcing material in the smaller batch quantity was going to be expensive. To reduce costs and allow flexible reordering among many styles, the brand invested in bulk material for multiple Purchase Orders (POs), having the material stored at Purnaa’s facility. This reduced logistical cost, streamlining workflows for both parties and created continuous production for Purnaa employees.
Finally, the brand needed faster and cheaper sampling of future styles. By establishing mutually agreed upon guidelines limiting product changes and material types for new styles, Purnaa and the brand created a unique sampling process to quickly and cheaply develop new styles. Many of these systems are different from Purnaa’s normal operating practices for customers but because this brand approached us for a long-term, collaborative relationship, we were able to tailor our services to their needs.
Collaboration is the key to a brand getting all they can from a manufacturer, creating a powerful win-win relationship.
How to Collaborate With Your Manufacturer
Step 1: Select the Right Partner
Evaluate your manufacturer’s current and future capacity and services. Consider incorporating these into your growth strategy. Using multiple services from one manufacturer creates a streamlined production process and more touchpoints for collaboration.
Learn about your manufacturer's goals and values - Every business is evolving, so get to know the goals your manufacturer has and assess how they may overlap with your goals. These will be the drivers for collaboration, with both you and your manufacturer recognizing the key benefits of the partnership. Examples of these include sustainability, operational or profitability goals.
Are you the right fit for them? - Consider your role in your supplier’s wider business. Are you a major customer or are you a smaller client in their wider client pool? Manufacturers do have favorites, bending over backward to keep certain customers happy, therefore are more likely to collaborate. Evaluate what aspects of your business fit well into your manufacturer’s business and request collaboration accordingly.
Step 2: Create a Plan
Once both parties are ready to collaborate, create metrics in which to measure success (i.e joint performance management systems). By sharing the same system of collecting and measuring performance data both parties see the impact of the changes and further anticipate potential successes or roadblocks.
Establish your baseline - how is your business or production behaving now and by how much do you need the key performance indicators to increase or decrease.
Different roles, same outcome - Brands often put the impetus of improving a process on the manufacturer, but a brand also can affect production efficiency or costs. A key example is decreasing material waste: the manufacturer can create efficiencies in the cutting procedure but brands can design products to create less wastage. If the brand and manufacturer are united on this, the KPIs will reflect this
Establish solid team buy-in - Ensure each team member recognizes their individual role in the partnership and has buy-in. Lack of buy-in from upper management and points of contact can undermine effective collaboration, so emphasize how this collaboration creates value.
Measure the impact - Collect data on the changed behavior and ensure both parties have access to the information. That way both teams can know the progress of the relationship and jointly address issues as they arise.
Step 3: Create Structures for Success
The essence of a successful collaboration is clear communication; creating structures to sustain communication ensures the longevity of the partnership.
In order to overcome differences in culture, organizational structure, and terminology, manufacturers and brands must create clear protocols and the means in which to collaborate. This can include having a location to share documents, view data, communication platforms that work for both parties etc.
If you have the budget, software such as SAP SCM, Oracle SCM Cloud, or Epicor SCM are industry favorites; but if this is not in the cards, set a bi-weekly time to connect with your collaborative supplier to check-in.
Collaboration is about creating win-win situations that save time, money, and energy in the production process. Find out how you can be contributing to Purnaa's social impact and beginning a collaborative relationship by submitting your design here.