Supplier development programmes (SDP) aim to enhance the capabilities and performance of suppliers. This could be to support future capacity requirements, improve quality and for mutual growth. These supplier development initiatives are often bespoke but focus on operational delivery, efficiencies, and innovation within the supply chain.
At Thornton & Lowe, we often work with public sector buyers and framework organisations to help them both engage, train and develop their approved suppliers. This could be:
Developing, monitoring and reporting on KPIs and SLAs
Service solution refinement and efficiencies
Value engineering
Definition and Objectives
Supplier development refers to the systematic process of working closely with suppliers to improve their capabilities and align them with an organisation's goals. The primary objectives include enhancing product quality, reducing costs, increasing responsiveness, implementing social value initiatives and supporting sustainable growth. Supplier development programmes often involve training, technical assistance, and collaborative problem-solving.
These initiatives typically target key suppliers who have a significant impact on the company's operations. By investing in supplier development, organisations can create a more resilient and agile supply chain, better equipped to handle market fluctuations and meet evolving customer demands.
For public sector bodies, it is a wider requirement linked to their corporate social responsibility. Supplier development programmes and engagement, such as preliminary market engagement, become really important for government organisations to demonstrate their sustainable procurement approach.
Importance of Supplier Relationships
Developing strong supplier relationships is one of the main benefits of effective supplier development programmes. These relationships form the foundation for open communication, trust, and collaboration. By nurturing positive supplier relationships, companies can:
Accelerate innovation and product development cycles
Achieve cost savings through streamlined processes
Make contract management easier!
Designing Supplier Development Programmes
Your supplier development programme will be based on your needs as an organisation and any perceived risk in the supply chain.
Supplier Selection Criteria
Which choosing the right suppliers for development? Your selection criteria should be based on strategic importance, potential for improvement, and willingness to participate!
Key factors to consider include:
Current performance levels
Strategic alignment with company goals
Financial stability
Technical capabilities
Capacity for innovation
Commitment to collaboration
Suppliers with a significant impact on product quality or supply chain efficiency often make good candidates. Those showing a strong desire to improve and invest in their capabilities are also ideal.
It's important to assess suppliers' long-term potential. This includes their ability to adapt to changing market conditions and technology advancements.
Setting Clear Expectations
Establishing clear expectations is vital for programme success. This involves defining specific goals, performance targets, and timelines. It's not a quick fix - so you want a business which is committed and willing to put the time in.
Key areas to address include:
Quality standards
Delivery performance
Cost reduction targets
Innovation expectations
Compliance requirements
Sustainable growth
These expectations should be documented in a formal agreement. This agreement outlines roles, responsibilities, and resources committed by both parties.
Need to discuss your Supplier Development Programme?
We can design, deliver or simply review your supplier development programme.
Let's take a look at some specific training and support examples which can form supplier development programmes:
Sustainable Growth: Suppliers should be encouraged to achieve key industry accreditations that demonstrate their commitment to sustainable practices. This can include certifications related to environmental management, social responsibility, and ethical sourcing. By supporting suppliers in obtaining these accreditations, they can align themselves with the public sector's sustainability goals and position themselves for long-term success.
Bid Writing: Winning future contracts often depends on the quality of the bid submitted. You want a supplier who is financially stable so this activity is key. Training suppliers in effective bid writing techniques can greatly improve their chances of success. This includes understanding the tender process, crafting compelling proposals, and highlighting their unique value proposition.
Policy Development, Improvement, and Refinement: Suppliers need to stay up-to-date with the latest policies and regulations relevant to their industry. They also need to reflect your policy requirements to ensure compliance. Training programmes can help suppliers develop robust internal policies that align with your requirements.
Developing for SLAs and KPI Reporting Requirements: Training suppliers on how to develop and adhere to SLAs and KPIs can ensure they consistently meet the agreed-upon standards. This includes setting realistic targets, establishing clear reporting mechanisms, and regularly reviewing performance against the defined metrics.
Efficiencies and Six Sigma: Encouraging suppliers to adopt efficiency-enhancing methodologies like Six Sigma can lead to significant improvements in their operations. Six Sigma focuses on reducing defects, minimising waste, and optimising processes. This can result in cost savings, which can be passed on, as well as increased productivity, and therefore higher customer satisfaction.
Value Process Mapping:This is a technique that helps suppliers visualise and analyse their processes to identify opportunities for improvement. By mapping out their workflows and identifying value-adding activities, suppliers can eliminate inefficiencies, reduce lead times, and enhance the overall quality of their services. Training suppliers in value process mapping is one example that can empower them to continuously optimise their operations and deliver greater value for your organisation.
Bid Writing Training
Building Sustainable Practices
Supplier development programmes are increasingly focusing on implementing sustainable practices to enhance environmental stewardship, social responsibility, social value and long-term business success. Key areas of focus include:
Reducing carbon emissions, minimising waste, and conserving natural resources. Specific targets are set for suppliers, such as decreasing energy consumption by a certain percentage annually.
Emphasising fair labour practices, workplace safety, and community engagement. Suppliers are encouraged to provide safe working conditions, fair wages, and opportunities for employee development.
Actively seeking to include diverse supply chains.
Establishing metrics to track progress, conducting regular audits and performance reviews, and identifying areas for enhancement to maintain accountability and drive ongoing advancements.
Adopting new tools for monitoring environmental impact and streamlining processes to support more efficient and sustainable operations.
Collaborative Projects and Partnerships
Long-term collaborative partnerships form the foundation for sustained innovation. Joint business planning sessions align supplier capabilities with the organisation's strategic objectives. This ensures both parties work towards common goals.
Co-development projects allow suppliers to contribute their expertise early in the product development cycle. Early supplier involvement leads to improved designs, reduced costs, and faster time-to-market.
Establishing clear communication channels is vital for effective collaboration. Regular performance reviews, supplier councils, and executive sponsorship programmes strengthen relationships at multiple levels. Digital collaboration platforms facilitate real-time information sharing and project management across organisations.
Knowledge transfer initiatives, such as staff exchanges or mentoring programmes, build capabilities on both sides. These activities foster a culture of continuous improvement and drive supply chain efficiency.
Carbon Reduction Plans
Have you considered your preliminary market engagement as part of your SDP?
Supplier development programmes: your questions answered!
What are the typical stages involved in a supplier development process?
The supplier development process typically includes assessment, planning, implementation and evaluation stages. Initially, organisations assess current supplier capabilities and performance. Next, they create tailored development plans - a gap analysis with options to fill those gaps, whether training related, technology or even cultural, for example. The implementation phase involves executing improvement initiatives. Finally, progress is evaluated and adjustments are made as needed.
How can a supplier development programme enhance supply chain efficiency?
Supplier development programmes can significantly boost supply chain efficiency by improving quality, engagement and commitment, while reducing costs and enhancing delivery performance. They help streamline processes, minimise defects and shorten lead times. Improved communication and collaboration also lead to better forecasting and inventory management across the supply chain.
What objectives should a supplier development plan aim to achieve?
Key objectives of a supplier development plan include improving product or service quality, reducing costs, enhancing delivery performance and fostering innovation. Plans should also aim to strengthen relationships, increase supplier capabilities and align supplier practices with the buying organisation's goals and standards.
In what ways can an organisation establish effective supplier development strategies?
Effective strategies include conducting thorough supplier assessments, setting clear performance targets and providing training and resources. Organisations can also establish joint improvement projects, implement incentive programmes and facilitate knowledge sharing. Regular performance reviews and open communication channels are crucial for strategy success.
How does supplier development contribute to overall business performance?
Supplier development positively impacts business performance by ensuring a more reliable and efficient supply chain. It leads to improved product quality, reduced costs and increased customer satisfaction. Enhanced supplier capabilities also drive innovation, enabling businesses to stay competitive and adapt to market changes more effectively.
What are the key activities entailed in implementing supplier development initiatives?
Key activities include conducting supplier audits, providing technical assistance and training, and implementing continuous improvement programmes. Organisations may also engage in joint problem-solving sessions, establish supplier councils and create supplier recognition programmes. Regular performance monitoring and feedback sessions are essential components of these initiatives.
