Making life twice as easy

Earlier this year I had Keith Ishikawa from TBM Consulting Group speak at a Churchill Club function about applying Lean Manufacturing techniques to software engineering. Keith was one of the original engineering team for Lexus and a major player in Toyota’s Lean Manufacturing push.

I was a bit concerned about Keith originally, as his Japanese accent was strong, but he turned out to be fabulous as he used plenty of hilarious anecdotes to make his points. Anyway, one of the lessons he passed on about running a lean manufacturing program was to have two suppliers for everything as it kept everyone on their toes.

I already have a tendency to use two suppliers for most things, but I hadn’t put much thought into why. Other than it was better to have a great commercial lawyer and a great family lawyer, rather than the same guy trying to do both jobs well.

Keith pointed out that there are quite a number of benefits to doubling up your suppliers, including:

1. Have great suppliers, rather than just good ones
By sharing around your services, it means you can engage the best person for the job rather than having one group do everything.

2. Improves the relationship
Knowing that it’s easy to shift your business away, your suppliers are motivated to constantly improve the relationship with you and can’t hold you to ransom.

3. Improves the service
As your suppliers desire to win more of your business, they will always strive to give you best price, best response times and best quality (rather than at best two out of the three).

4. Provides a backup plan
You can’t be left in the lurch by a supplier failing or discontinuing a service as you always have someone warmed up and ready to take their place.

The difficulties with employing two suppliers is of course you need to manage both suppliers (double the number of lunches?) plus you need to think through how you want to split the business.

It’s not the hard though with secondary services, eg:

  • Lawyers – overseas versus local.
  • Accountants – company secretarial versus tax.
  • Stationery – marketing collateral versus office products.

Doubling up parts of your manufacturing supply chain can cause headaches as you try to ensure design standards are met, but then again tyre replacement services manage to supply more than one brand of tyres, so it’s not that hard. It just requires thinking through exactly what you want from them.

I have also been thinking about this since my personal accountant has decided to move back to the country town he came from. My other accountant is now doing all my work while I search for a replacement at my leisure.

Life is twice as easy.

To read more Brendan Lewis blogs, click here.

Brendan Lewis is a serial technology entrepreneur having founded: Ideas Lighting, Carradale Media, Edion, Verve IT, The Churchill ClubFlinders Pacific and L2i Technology Advisory. He has set up businesses for others in Romania, Indonesia and Vietnam. Qualified in IT and Accounting, he has also spent time running an Advertising agency and as a Cavalry Officer with the Australian Army Reserve.

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