Once you’ve taken the first steps toward total efficiencies, your next goal will be to pursue true (as opposed to apparent) efficiencies. The beauty of true efficiency is that it supports a customer-driven production mindset and total efficiency. This approach reflects a radical shift in what happens on most shop floors, where traditionally, in order to achieve greater efficiency of assets, an operation will turn out more products than needed. What results is overproduction—the greatest waste of all—and, of course, only the appearance of efficiency.

In contrast, making the required number of products with less assets works because you as the supplier don’t decide how many to produce; the customer decides. But, as a supplier, what you can control is cost, and this approach puts you well on your way to doing just that as it brings you closer to your customer and benefits the entire supply chain. The result? Less waste, a natural reduction in costs and improved efficiencies across the board.

Reduce Waste—Don’t Force Work

Another supply chain pitfall that comes with chasing a purely competitive relationship has to do with forced work, in which lower costs are achieved by demanding more work without reducing waste. The goal, however, is not to do more by working harder, but by working smarter—that is, developing suppliers with the know-how to increase the portion of value added in every job by reducing waste. Here, the objective is to favor suppliers who have an innovative, inspired and empowered workforce, as opposed to class warfare.

How do you achieve such a workforce? Begin by redefining the role of your managers, in which they see themselves as teachers whose job it is to spot, and in some cases, develop supplier talent that will, in turn, become allies who partner to further reduce risk throughout the supply chain. Acknowledge managers with this kind of approach and reward suppliers who thrive under such guidance, and watch the improvements within your operation that follow.

From Exclusively Competitive to a More Nurturing (and Rewarding) Spirit of Cooperation

In order to manage and maintain a successful supply chain, your goal should be to shift from short-term relationships that are exclusively competitive in nature toward ones that foster greater cooperation. This is done by focusing on the customer even as you work towards achieving total and true efficiencies while eliminating waste. This can only be mastered through accumulated practice and, therefore, through a necessarily longer-term relationship that must be maintained via mutual benefits rather than pure competition.

Begin at home and go from there, and you’ll soon see how, in fostering closer, more mutually rewarding relationships across the board, you’ll reap the rewards of improved quality, cost and lead time as a result.