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Trend of the Week: Supplier Development

One key way to ensure supply chains stay strong in the face of disruptions—whether that means terrorist attacks on shipping in the Red Sea or a worldwide pandemic—is to strengthen relationships with suppliers beforehand.

As manufacturers learn from past disruptions and prepare for future ones, many are putting supplier development plans in place to strengthen and support their trading partners. Here’s what you need to know about this last major trend of 2024.

What manufacturers should do: Manufacturers should consider these steps when creating supplier development plans: 

  • Define how to be a good trading partner.
  • Outline supplier criteria and how to meet those criteria.
  • Include scenario planning to stay resilient in a more disrupted future.
  • Increase transparency with suppliers.
  • Use AI and data-driven decision-making to optimize supplier relationships.

Expert opinion: Lora Cecere, founder of Supply Chain Insights, explains why this increased focus on suppliers is so crucial to manufacturers.

  • “While trading partners—customers and clients—share assets and data across multiple tiers of manufacturing and distribution, network collaboration over the past decade declined as companies focused inward on transactional efficiency,” she says.
  • “Only 30% of companies have a supplier development program, and less than 20% know the location of their second- and third-tier suppliers.”

Resources for you: Check out these NAM resources on supply chain issues:

  • CONNEX Marketplace uses data visualization tools to help you understand your supply chain better and mitigate risks of disruption.
  • Check out Operational Insights, a twice-monthly resource that covers everything from environmental regulations to supply chain management to cybersecurity.
  • Read this recent survey from the Manufacturing Leadership Council, the NAM’s digital transformation division, about manufacturers’ supply chain efforts. The bottom line: supply chains were less resilient in 2023 than the previous year, but companies are employing new technologies and solutions to shore them up.

Read the full 2024 trends report here.

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