Cut supplier numbers and the Net will speed up the chain

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Cut supplier numbers and the Net will speed up the chain



The Internet and e-working have made possible a huge increase in the "clock speed" of internal and supply chain relationships in manufacturing, said Xerox strategy chief Ton van Esch at CIM2000.

But he added that e-business methods require a savage cull of suppliers to work effectively. "First rationalise your suppliers, then work out your IT plans and put them into practice," said van Esch, citing his own company which has cut supplier numbers from 5,000 to 400.

"Xerox has moved from a situation where it had a large number of suppliers and the relationship was characterised by conflict and long lead times. The Internet has allowed us to develop better, long-contract relationships with fewer suppliers who are involved more closely with the design process," he said.

Van Esch said the aim is for instant, real-time response right across the company's 10 worldwide manufacturing locations. Rationalised information exchange has allowed cost savings to be made all the way through the supply and production process, according to van Esch.

Fewer suppliers working in partnership means fewer components and greater standardisation; reduced lead times mean decreased inventory, and online order tracking has given sales people better information when dealing with customers.

"The Internet is a gateway allowing manufacturers and suppliers to co-operate more efficiently," he added.


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This was first published in November 2000

 

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