As companies increasingly go to market via a complex, globally interconnected network of suppliers, they rightly worry about losing control of their brands. Functionality, look, feel, timely delivery, reliability, and service and support are all part of the brand commitment a marketer makes to its customers.
A disappointment with any aspect of this promise can alienate consumers and, thanks to social media, quickly diminish brand trust on a widespread basis. That’s why electronics OEMs, software companies, and brand managers must scrutinize product design and supply-chain partners to ensure the integrity of their operations, technology, practices, and finances. Specifically, companies need to investigate 11 vital criteria before making a deal.
Fundamentally, businesses are a reflection of their management. The reputation, experience, and depth of talent are critically important considerations in selecting a product design or supply-chain partner. Those responsible for orchestrating global resources should personally meet and build close professional relationships with the management of each key partner company.
CAPABILITIES AND FACILITIES
Complex supply chains require multiple partners, each responsible for a discrete part of a large production process. With electronics products, precision manufacturing capabilities that meet high-performance specifications are essential. A thorough review of a partner’s production facilities should not only evaluate manufacturing equipment, it should also assess quality systems and testing instrumentation, among other factors.
Most companies will only work with manufacturing partners who meet certified quality standards. Rigorous vendor selection and control is essential. Of fundamental importance in selecting design and supply-chain partners is verifying that they have well-documented quality control procedures throughout their operations—and that they practice them conscientiously and consistently.
Financial stability is essential in any business relationship. Yet verifying the financial status of businesses in foreign countries, some of which may be too small to be covered by rating agencies, requires investigation and persistence. Does the company maintain sufficient cash reserves? Does it pay its suppliers and employees in a timely manner? Can it finance inventory? How does it account for upfront deposits or pre-payments? These questions and others are important to assess in advance of contracting with any partner.
Global supply chains depend on complex logistical arrangements, with components manufactured in one location traveling across borders for just-in-time assembly in another. Finished goods may be distributed to pooled locations or sent directly to final destinations. Consequently, supply-chain managers must carefully assess the logistics expertise of each partner to avoid costly shipping mistakes and delays and ensure optimal efficiency.
CORPORATE SOCIAL RESPONSIBILITY
End users and other supply system partners hold companies accountable for the working conditions of all of the facilities their products pass through. They expect that people employed in these places are treated ethically and have safe workplaces that meet international standards. Verifying that supply chain partners operate in a socially responsible manner is vitally important to enhancing and safeguarding a company’s public posture and brand reputation.
Understanding, planning for, monitoring, and complying with local rules and regulations in a global market is vitally important across a company’s entire supply network. Complicating this picture is the fact that authorities frequently amend and augment these requirements. This is all the more important in markets like aviation and medical devices.
INTELLECTUAL PROPERTY PROTECTION
In orchestrating a global network of suppliers, companies provide outside entities with access to their proprietary information and designs, patented processes, and registered trademarks. To protect this intellectual property, businesses must verify their partners’ policies and practices regarding information security and access, confidentiality, and employee covenants. Furthermore, contracts and non-disclosure agreements must be clearly worded and legally enforceable in each country where business is conducted.
A robust technology platform is essential to managing an efficient global supply chain. Each participant must be evaluated with regard to its technological capability to input real-time data about its operational components and responsibilities.
An intangible but essential quality of product design and supply-chain partners is their ability to solve problems. In the multifaceted process of going to market, unexpected obstacles often arise. Partners that can address these problems with speed, efficiency, and creativity are invaluable in keeping a complex supply chain operating smoothly.
Increasingly, customers value products that meet high standards of lifetime environmental sustainability, from design through manufacturing, distribution, and, ultimately, recycling. When this consideration is critical to a brand’s positioning, supply-chain partners should be assessed regarding their proven sustainability practices.
Evaluating all of these criteria is a daunting task. However, it’s essential whenever a company entrusts its most valued asset—its brand—to outside partners!