It sounds like a good idea, doesn’t it ? In a world where the ideal product can be summarised as “perfect, free and now”, you want suppliers who can deliver good quality products at a reasonable price and meeting a given deadline. So you want suppliers that you have vetted for their capability to deliver the goods, so to speak. In essence this means that said supplier needs to be ISO9001 approved as a minimum requirement.
Except that it may well mean that if you’re approaching this approval process too bureaucratically you’re going to be the victim of some unintended consequences. First of all, it means that you’re raising the bar for entry in the supply chain to medium and large companies who have the muscle to maintain an ISO certification, potentially leaving out small companies that may be better at meeting your needs but don’t have the paper mill to satisfy your requirements.
A second drawback is that, with the number of suppliers now whittled down to a mere handful, you’re less likely to get the best financial deal because (a) larger suppliers are less in need of your contract than small suppliers are; and (b) with fewer competitors the pressure to keep the price low is reduced.
There’s a number of other drawbacks that I encountered when in Tinplate R&D : the first one is that trying to get something done quickly is well nigh impossible if it depends on getting a new supplier on the approved list – the process in British Steel Tinplate was so ponderous that you’d do anything to avoid being faced with this option. As explained in the blog entry about the hand beader, a handy alternative available at the time for smallish expenses was to buy the items yourself and claim them on your personal expenses.
The other thing that happened to us was when our Soudronic welder was due for its annual service. Soudronic had been taken off the approved suppliers list because “you don’t seem to have used them in the past year”. Well no, unless we have a problem with our equipment the annual service is all that’s required. And no, I can’t give you two alternative suppliers: this is a specialised type of welder, not just any old garage or back garden outfit, and only a Soudronic engineer who knows the equipment and knows what he’s doing can be let loose on servicing the equipment. And yes, I realise the engineer needs to come from Switzerland – Soudronic is, after all, a Swiss company.
Fortunately I was no longer exposed to this type of aggravation once I had moved to Ebbw Vale and beyond to Llanwern and Port Talbot. So maybe I’m being unfair on Tata’s current system for approved suppliers and everything makes far more sense and we’re really getting the best deal out of our suppliers, but I can only talk about the time when I had to deal with the British Steel system. Hopefully it’s better now because at the time it was a bit of a pain the neck.