9. Supplier Segmentation

Supplier segmentation. Automakers have literally thousands of suppliers. Steel to the engine parts to the leather for the interior, plastics, electronics, and so on. And they cannot have exactly the same high level relationship with each one. So they have to segment. They have to pick those key suppliers that are critical to their business and have long term highly integrated relationships with them. And then everybody else will be treated differently based on the limited resources that we have available. Here we are at a local Honda dealership. And Honda, like Toyota is known for maintaining very good and close relationships with a lot of their key suppliers.
We have previously discussed the [INAUDIBLE] matrix as one way of segmenting and classifying suppliers in different areas. What I’m going to talk about now is a more general classification scheme. That can be more useful to different types of companies, different organizations, and different situations. Now the basic philosophy behind it is that we’re going to look at the benefits that a supplier may provide. And the challenges that we may encounter in working with that supplier. And by considering both benefits and challenges. We’re going to come up with tailored strategies that take advantage of the most beneficial supplier. While minimizing the risk in the most challenging suppliers. Benefits are areas where we can gain by working with a certain supplier. For example, we may be able to gain a cost advantage because this supplier’s very efficient at providing that one input that we need.
Another advantage is operational flexibility or efficiency. By working with a certain supplier who is very efficient at how they deliver the products to us. We may be able to optimize our internal operations.
Next, we may gain a marketing advantage from working with a supplier.
For a very long time, customers chose computers that had a sticker on the box, and that sticker said Intel Inside. Because consumers knew they were getting an Intel processor. Which was superior to any other chip that they could buy from other companies. And finally suppliers may be able to help us innovate. There are many examples where both suppliers and manufacturers have worked together to come up with new products. And often, for a manufacturer, it’s very challenging to have access to innovation, but suppliers may be better at it. So we can take all of these benefits and put them in the plus column. Challenges are those areas that make it more difficult working with a certain supplier. There are two categories. One is risk. Working with a supplier, we put some faith into that one company to deliver what they said they would deliver. And there may be unforeseen events that may prevent the supplier from delivering to us, for example, catastrophic events. If the supplier’s in a flood zone or an earthquake area, it may be possible that their deliveries may be disrupted. Or bankruptcy can occur and then they have to shut down. Because we are too dependent on them and they may be too dependent on us, that can lead to problems. The other area is complexity. Complexity just adds a lot of layers of administration and management. That are required to make the processes work with a certain supplier. Having suppliers that require more complexity or more management makes it difficult to achieve gains in performance. Regardless, we have to consider both the benefits and the complexities when structuring our relationships with the suppliers. And now, what we need to do is we need to score both the benefits and the challenges In working with our suppliers. And each supplier will receive a score on all of these areas.
Now how do you do it? You take all the benefits and you weigh them depending on what is important to you. And you do the same thing with the challenges. And then you come up with composite scores in both the benefits area and the challenges area. And you can create several quadrants of high challenge/high benefit suppliers which require a lot of management. And you treat them very differently than the low benefit/low challenges suppliers, which are much less complex to manage.

Jim Rohn Sứ mệnh khởi nghiệp