Suppliers have access to the stock levels of customers and once stocks reach minimum levels they are replenished automatically by the supplier. Concept of ‘Smart Bins' is becoming common in the industry today. Suppliers are being relocated or a warehouse is established near the manufacturer for uninterrupted JIT supply. The trend to invest in IT infrastructure to effectively link all the critical suppliers and customers is on the rise. The IT industry is presently seeing a boom in the requirements of supply chain solutions to integrate the complete value chain.

Lean and green

Companies are working towards rationalising their vendor base to be able to focalise efforts to make them efficient and reliable with respect to quality and delivery. A few companies have even divided their suppliers into tiers, which helps them reduce total data processing, and streamline the information flow. Information flows only to the Tier I supplier who directly meets the plants requirement with the support of Tier II and III suppliers.

There is also increased focus on ensuring that the supply chain is greener by reducing the environmental footprint across the chain. Companies are looking at the impact, risks, and the opportunity available in the supply chain and identifying projects that will help make their supply chains sustainable. Vendors are being trained on these concepts, though in a small way and there is a much ground to be covered.

Flexibility

Organisations are making efforts to train suppliers on new manufacturing techniques to improve their performance and hence supply chain performance. Employees from the customer's manufacturing plant spend time at the supplier's manufacturing locations to support and guide implementation of new manufacturing practices. It's a win-win situation both for the customer and the supplier. This results in suppliers having flexible and reliable operations, with which they can meet the variable demand without maintaining high inventory levels. They also cut manufacturing costs by eliminating non-value added activities in their manufacturing processes. Companies having reaped the benefits of activities like Value Stream Mapping (VSM) and Value Engineering in-house now conduct such activities at the suppliers' end to reduce their costs and increase efficiency.