Companies will never achieve their full growth and profit potential, let alone gain the benefits of their supply chain management system, as long as business leaders continue to talk about value-added supplier partnerships while continuing to treat their suppliers as adversaries. Material handling and inventory storage are two of manufacturing's high cost, non-value-added activities. The elimination of the stock room, as it is known today, should be a strategic objective of all manufacturers.

A well defined business management supply chain strategy and ERP solution can provide companies the ability to counter the growing trend of copies of the original manufactured components. In the automotive industry, as with other industries, the grey market is the third party market in non-genuine parts. This market is growing rapidly, especially within Asia, and is a threat to manufacturers and distributors. Kitting, which links together key components, has become an integral and critical competitive strategy to counter the grey market.

A significant opportunity in supply chain management is shown in current studies in the Supply Chain Management field which indicate that a 1 percent reduction in the cost of purchased materials is equivalent to a 12 to 18 percent rise in sales growth. This presents an enormous opportunity for companies that can take advantage of this cost reduction in this time of economic stagnation. Companies must find a way to improve their bottom line when their sales revenues are either flat or declining.

One of the critical key success factor in determining the effectiveness of a Supply Chain Management is the approach of negotiation between the buyer and suppliers. The concept of squeezing the suppliers in order to gain a desired outcome can back fire the buyer in the long run. The concept of forcing the suppliers to reduce price is a win-lose relationship in the short term. In delivering goods or services, each parties involved must learn to negotiate with a win-win attitude.

In my book, Developing Strategic Alliances, I included a value update form. Using this form will dramatically help you to add value to the supply chain. If you have not yet had time to read the book, here is the basic idea: Write down on separate sheets of paper the value you are getting from the relationship with each of your manufacturers and then the value you think they are receiving from working with you. Have them do the same thing, and then switch. What an eye opener. Use the same idea with each of your customers. Now you will get a glimpse of what your manufacturers and customers consider as valuable. Now you can really do something about adding value to your distribution channel.

A few franchisors have joined the American Association of Franchisees and Dealers in an attempt to show that they are they are franchise systems which want what's best for their franchisees, and to achieve the approval, or rather the seal of approval from the AAFD. Still, it seems to me that this is a double edged sword. If a franchisor joins a franchisee rights group that is run by franchisee attorneys, some of which are interested in class-action lawsuits against other franchisors they may find themselves in a bit of a pickle down the road.