2024 survey data: the state of supplier collaboration

In this session, MJ Smith, Head of Marketing at CoLab, presented the findings from CoLab’s recent survey on supplier collaboration. With over 250 engineering leaders from large manufacturing companies participating, the survey aimed to understand current practices and challenges in supplier collaboration during new product development (NPD). MJ delved into the data, highlighting key trends, challenges, and strategies companies are adopting to improve supplier engagement and collaboration. The insights reveal a significant gap between the current and ideal states of supplier involvement, pointing to opportunities for enhanced communication and streamlined processes in the engineering and manufacturing sectors.

Key Insights

1. Current Supplier Feedback Challenges:
   • A staggering 90% of engineering teams reported receiving supplier feedback too late in their NPD process. Only 9.2% indicated they receive most supplier feedback while the design is still flexible and easy to modify, leading to significant rework and unplanned costs for many companies.
   • A significant gap exists between the current state, where companies engage with an average of 32% of their supplier base for design feedback, and the ideal state, where they wish to engage 78% of their suppliers. This indicates a need for more systematic supplier collaboration strategies.
2. Primary Drivers for Supplier Collaboration:
   • The most cited reason for investing in supplier collaboration strategies is the need to tap into supplier expertise as products become more complex. This aligns with the evolving demands of modern product development, where specialized supplier knowledge can significantly impact product quality and innovation.
   • Other drivers include managing supply chain risks, responding to competitive pressures, and improving overall product quality and innovation capabilities.
3. Impact of Poor Supplier Collaboration:
   • Poor communication and late feedback from suppliers often lead to product development delays and long lead times. These inefficiencies can have cascading effects, impacting the entire product lifecycle and reducing the ability to meet market demands on time.
   • Interestingly, high costs of goods were not seen as a direct result of poor supplier collaboration, suggesting that the primary concern for companies is maintaining timelines and quality rather than cost control in this context.
4. Barriers to Effective Supplier Collaboration:
   • The top barrier to effective supplier collaboration was identified as the slow feedback process from suppliers, followed by the lack of access to PDM and PLM systems. These factors contribute to delays and inefficiencies in incorporating supplier input into the design process.
   • Only 6% of respondents believe that all suppliers should have access to PLM, indicating a preference for controlled and selective sharing of design data with suppliers. This reflects concerns over data security and intellectual property.
5. Strategic Approaches for Improvement:
   • Most companies are looking to standardize their tools and processes for supplier collaboration and are willing to invest in new tools to support these efforts. Many are exploring ways to partner more closely with their top suppliers and involve them earlier in the design process.
   • There is a preference for creating a dedicated access layer for suppliers rather than providing direct PLM access. Tools like CoLab’s portal functionality allow for efficient, controlled sharing of data without duplicating files or compromising security.

Tactical Tips

1. Implement a Controlled Data Sharing Approach: Instead of giving suppliers full PLM access, consider using tools that allow for controlled sharing of relevant data. This approach balances the need for collaboration with security concerns and minimizes the risk of unauthorized access to sensitive information.
2. Focus on Early Engagement: Develop specific initiatives to involve suppliers earlier in the design process. This can prevent costly rework and ensure that critical supplier feedback is incorporated when it can still influence design decisions without major disruptions.
3. Reduce Administrative Burden: Streamline the process of sharing and receiving feedback by reducing manual steps and automating data consolidation where possible. This will not only speed up the feedback loop but also increase the likelihood of engaging a broader base of suppliers.
4. Leverage Technology to Manage Feedback: Utilize tools that integrate directly with PLM systems and facilitate seamless collaboration with suppliers. Solutions like CoLab's portal feature can help manage multiple feedback streams and provide a consolidated view of supplier input, reducing administrative overhead.
5. Create a Roadmap for Supplier Collaboration: Start with your top suppliers, establish effective collaboration processes, and then expand these practices to a larger portion of your supply base. This phased approach allows for incremental improvements and reduces the risk of overwhelming your teams and suppliers with new processes.

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