Interaction With Suppliers
For suppliers who are creating something custom and cutting-edge for you—something that has risk—create partnerships, not contracts that define requirements.
A partner shares the risk and the rewards, in proportion to their contribution. That aligns their incentives with yours: instead of trying to get the most from you, they will be trying to make sure that the product succeeds.
For commodity suppliers, always have alternatives lined up. Be ready to switch from one to another on short notice. Remember that it takes effort and time to connect your logistics systems to theirs, if applicable. And don’t create long-term contracts that lock you in. Long term-contracts are cheaper as long as everything stays the same, but in today’s unpredictable world, things tend to not stay the same.
For suppliers who are partners, invite those suppliers to your system tests. Make them feel like they are part of the team, because they are. Remember that everyone needs to have a working understanding of the entire value stream, and that includes your partners.