Short Answer:

Treat suppliers like you would customers – and logistics/supply chains like any value-added process that needs constant monitoring and continuous improvement (Lean). Recognize that some of the biggest value adds in productivity and differentiation occur at the handoff points.  Like relay races in the Olympics, races are won or lost (or teams disqualified) at the handoff points.

Longer Answer:

Paying attention to the complete end-to-end process (value chain) of delivering a product/service to the market is imperative and this includes your suppliers. The key is using dynamic pricing to smooth out the flow of products/services through the entire supply chain. This is what Dell did early on, recognizing that providing a smooth throughput for their suppliers would result in preferential treatment. They would vary the price of certain desktop and laptop configurations to guarantee that they were selling what their suppliers had in stock and not selling what they didn’t, eliminating returns and mad scrambles.

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