Improving Relationships with Suppliers​

One of America’s largest heavy truck manufacturers needed to address unplanned supplier shortages, quality problems and, in some cases, even supplier bankruptcies. As part of a larger organizational improvement project, Percipio was engaged to conduct a supplier risk assessment and identify ways to mitigate risks at critical suppliers.​

Challenges

• Identifying critical suppliers – assess criteria that contribute to supplier risks at a detailed level and analyze root causes associated with the risk
• Defining and implementing mitigation measures at identified suppliers​
• Supporting ongoing supplier development programs

We applied a proprietary risk-assessment model that assesses supplier risks holistically beyond typical quality and delivery metrics. Using both interviews and online surveys, risks were assessed across six categories – relationship, performance, HR, supply chain disruption, financial health and environmental indicators – and on potential impact to revenue, not only on the typical spend metrics. This fully brought to light the revenue exposure of disruptions.​

Assessment results were presented, and critical suppliers were identified and analyzed in greater depth. We brought our client and its suppliers together in facilitated workshops that included root-cause analysis through Ishikawa diagrams, where together they identified a clear action plan for risk mitigation and issue resolution.​

The client was able to make informed decisions regarding supplier development and supply base optimizations. Mitigation actions at critical suppliers improved performance and reduced future risk. Percipio developed a training manual which reduced time to integrate this approach across other business units, ensuring rapid realization of benefits in the future.