GDI Consulting & Training Company is excited to announce the official launch of our newest service offering within our Supply Chain Improvement Practice.  Our new Comprehensive Supplier Performance & Risk Assessment service provides a structured fact-based methodology that clinically assesses the performance of your company’s significant materials suppliers by quantifying up to 18 categories of risks that may directly impact your company’s performance.  This service offering has been in development for nearly two years and has been fully tested in numerous manufacturing companies.  We are now making this service available to all manufacturing businesses.

Is Your Supply Chain at Serious Risk?

“Global supply chains are full of numerous unknowns and risks.  There are really only 3 ways to manage these risks in your supply chain:

• The first is to buy your way out of the risks with inventory.  Either you own it or your supplier owns it.  In either case, the capital cost of just-in-case inventory will find its way into your product cost and onto your balance sheet.  Your margins and working capital management will suffer, which by the way, causes your investors to believe you do not know how to operationally manage a supply chain!  Thus, your company’s valuation will suffer.
• The second way is to proactively manage the risks, which first requires precise knowledge of what the risks are and competent knowledge of the potential for disruptions that can manifest from the risks.  Once this knowledge exists, appropriate focused actions, terms and conditions can be applied to the supplier relationship.
• The third way is to ignore the risks…  a really bad idea!                                                                            
  

Companies that don’t apply performance & risk assessment rigor to their analyses of critical suppliers are risking more than today’s profits.  They are risking longer term market share and shareholder confidence simply because they believe that if they ‘expect’ their suppliers to perform, they will.  Needless to say, this is a naïve and dangerous view of the global supply chain in a lean-centric world.”

Why Assess Suppliers’ Performance & Risks?

Manufacturers who choose to source significant amounts of materials and components from global suppliers are creating increasing and substantial risks within their supply chains.  With the aggressive adoption of Lean manufacturing techniques that ultimately reduce supply buffers (along with cost), these same manufacturers are discovering that sourced-material disruptions can, and often do result in dramatic and unfavorable impacts to:

•  material delivery reliability
•  total material cost, and
•  received material quality

Without a periodic comprehensive analysis of Suppliers’ capabilities, manufacturers are unnecessarily risking their customer service levels, customer loyalty, gross margins and shareholder value.  Proactive and thorough due diligence of critical Suppliers is a new necessity in the global supply world where distances can be great, supply complexities can be even greater and consequences of poor supply can be devastating to the bottom line.

How Much Effort Is Involved?

Effective assessments of critical Suppliers are not performed in a simple visit over a couple days.  Those who execute Comprehensive Supplier Performance & Risk Assessments must be specially trained in a broad range of specific fact-based analytic methods, techniques and protocols.  Additionally, properly executed assessments must be performed quickly yet thoroughly…  requirements GDI makes possible with skilled Supplier Assessment Teams, proprietary software and comprehensive methodologies.

A thorough Supplier assessment, conducted by GDI Consulting & Training Company, requires a team of up to 3 highly-skilled analysts over a 3-week period in order to execute a structured (and repeatable) process in roughly the following manner:

• 1 week of preparation and analysis of off-site information including Suppliers financial statements, customer service data and available public data.
• 1 week (6 days) on-site analyzing Supplier-specific performance in critical functional areas.  Numerous structured observations relating to the triple risks of Supplier Delivery Reliability, Product Delivered Quality and Supplier Economic Viability, are developed. 
• 1 week off-site drawing conclusions from the previous 2 weeks of data gathering and analyses efforts.  A final report is developed, presented and reviewed with your management.

The GDI Comprehensive Supplier Performance & Risk Assessment practice draws heavily from nearly thirty years of manufacturing consulting experience, numerous formal fact-driven methodologies from our successful operational due diligence practice and newly created proprietary software that provides automation to our methodologies.  It is this automation that provides us with breakthrough capabilities, allowing us to complete a thorough and critical assessment of any Supplier’s performance and risks in just 3-weeks.

What are the Deliverables?

At the end of each Comprehensive Supplier Performance & Risk Assessment, GDI Consulting & Training Company will deliver a thorough report describing how your Supplier creates, or mitigates, up to 18 specific sources of supply risks within your corporate supply chain.  Specific Supplier capabilities and risks defined and graded in the final report, include:

1. Supplier’s Economic Viability

2. Supplier’s Production Methods, Equipment and Facilities

3. Supplier’s Management of Product Quality

4. Supplier’s Manufacturing Planning and Scheduling Capabilities

5. Supplier’s Inventory Management Capabilities

6. Supplier’s Procurement Management Capabilities

7. Supplier’s “Supplier” Analysis

8. Supplier’s Logistics Management Capabilities

9. Supplier’s Engineering Strengths and Weaknesses

10. Supplier’s Leadership and Management Capabilities

11. Supplier’s Critical Human Resource Management Issues

12. Supplier’s Data Integrity and Information Sharing

13. Supplier to Customer Integration

14. Supplier’s Catastrophe Planning and Management

15. Supplier’s Corporate Governance and Ownership

16. Supplier’s Corporate Citizenship Measures

17. Impacting Supplier Legal Issues

18. Supplier Delivered Cost Information, including “Should-Cost” and “Could-Cost” Insights