By: Chrys Tarvin and Steve Forsyth
With all of the obvious advantages of converting to an inbound consolidation program, you already know that this increasingly popular move is the right one for you. However, your supply chain depends on a lot of people and you may be asking yourself, “how can I convince my suppliers to make this move?” Fortunately, a well executed inbound consolidation program benefits everyone: you, your customers, and even your suppliers too!
Your supplier partners should be aware that making the transition to an ICP is, in fact, to their advantage. You may even have some suppliers who are already requesting such a conversion after experiencing the benefits when their other business partners made the switch. However, for those who are new to inbound consolidation, it might be helpful to point out several key advantages.
Of course, you could start by pointing to the improved operational efficiency that they will experience. This efficiency is primarily driven by an “assigned day of the week” shipping model and many suppliers are extremely pleased with the results. Suppliers who have already participated in similar inbound consolidation programs regularly report that structuring their business around day of the week shipping allows them to more accurately plan their resources. This approach creates greater efficiencies derived from better consistency and predictability.
Yet if these operational improvements aren’t quite enough, there are plenty of other benefits with which your suppliers should be pleased. How does increased sales sound? By utilizing a well-structured inbound consolidation program, the overall supply chain will experience shorter lead times and, in turn, improved service levels. Studies show that these improved service levels regularly translate into an increase in sales. Higher sales means higher profit for everyone, including suppliers.
What’s more, ICP conversions benefit suppliers by taking away most of the shipping burdens. With a switch from prepaid freight terms to collect & allowed, suppliers will also be relieved of responsibility for things such as carrier claims or late appointments. The supplier is responsible for preparing their product for ontime day of the week shipping and must meet compliance standards at that time. However, after the goods are collected, they no longer need worry about what happens next.
Finally, if dollars and cents are the only language your supplier speaks, you can point out that by engaging with an ICP, your suppliers will likely experience some savings themselves. With new assigned day of the week shipping and greater overall efficiency, they may be able to reduce the need for regional distribution and satellite locations. Further, as product begins to flow more efficiently through the supply chain process, it is likely that your suppliers will be able to save on unnecessary manpower or duplicated job processes.
With an inbound consolidation program conversion, there are many reasons for your suppliers to feel not only satisfied but even pleased. In fact, with the growing popularity of ICPs, chances are good that your suppliers are already well aware of these advantages and happily engaging in these practices with their other business partners. All you need to do is take the next step to join them.
Still a little concerned about negotiating an inbound consolidation program conversion with your suppliers? You don’t have to do it alone! Let us help! If you are ready to explore an ICP conversion and supplier negotiations, contact us today to discuss your next steps.
Designed, integrated and implemented Inbound Consolidation Programs for Fortune 100 and 500 Companies throughout North America, south America, and the Pacific Rim improving cost, service, quality and speed.
Authors’ Note: This article is the fourth of the TPG series on Inbound Consolidation.
Find the previous post here: Ditching the Spreadsheets.
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