The Importance of Supply Chain Relationships

There's lot of talk about supply chain management (SCM) and how it's critically important to success of a business. Touching every aspect of business operations from logistics and purchasing to information technology, an organization's supply chain and how it's managed can make or break a company.

What exactly is a supply chain and what's so critical about the role it plays in business? Most importantly, why should you care about your vendor's supply chain?

The simple definition of SCM is that it is the handling of the entire production flow of a good or service ” starting from the raw components all the way to delivering the final product to the consumer. Much more than a purchasing and negotiation function, SCM is the design, planning, execution, control, and monitoring of supply chain activities with the goal of creating net value. These activities include building a competitive infrastructure, leveraging logistics, integrating supply with demand, and measuring performance globally. That's a lot of responsibility and a pretty big deal in an organization.

The culmination of these activities when effectively executed can result in significant savings to customers through the application of competitive advantages realized through a well-diversified, supply chain. When it comes down to it, supply chain managers are entrusted with a lot of responsibility and find themselves often to be the primary driver of product costs, inventory, and customer service.

In business, it's about people. It's about relationships. “ Kathy Ireland

While there are many things that companies can do to drive a successful supply chain initiative including huge investments in technology, the greatest opportunity for success comes from a focus on relationships.

Mismanagement of supply chain relationships can have a devastating effect from suppliers clear through to customers. Strong relationships benefit the organization, the supply chain, and ultimately the end customer.

Effective supply chain relationships carry the benefits of:

• Creating a collaborative and cooperative environment
• Fostering innovation
• Better compliance with rules and regulations
• Greater transparency and access to information

ACE's Director of Procurement, Dan Brownfield explains, Relationships are everything when it comes to the ACE supply chain. We've found over the years that it's critical to maintain strong and frequent communications with our strategic suppliers. Looking at them as true business partners, we've be able to overcome those unexpected hurdles that can derail operations otherwise.

A lack of transparency results in distrust and a deep sense of insecurity . “ Dalai Lama

When you take a look at our product line and diverse industrial knife

manufacturing experience, As a global organization, there are many factors we have to take into consideration when we're building and managing our supply chain including trade regulations and laws that vary from country to country, transportation time, technological capabilities of vendors, and more. The value of solid relationships with our sources that allow us to trust in their transparency can mean the difference between getting products onto our shelves, shipped, and into our customers' hands versus having items stuck on a carrier or at the dock, he continues.

The better our relationship with our supply chain, the more transparency we having in our partnerships. This openness provides ACE with the ability to be transparent and open with our customers as a result. Over the last five decades, we've built an ironclad network of suppliers around the globe that provide a diverse supplier network that allows us to source our products from a variety of partners. In turn, this helps us mitigate risk of stock-outs due to late shipments, provide better in-stock availability of products customers want when they need them, and manage our costs so we're able to pass along savings to our valued customers, added Brownfield.

When the trust account is high, communication is easy, instant, and effective.  “ Stephen R. Covey

American Cutting Edge has a long history in the converting and plastics recycling industries, providing cutting solutions for every step of the plastics recycling loop including the pelletization of virgin material, which is used to create plastic which can be converted into millions of different products. At the end of the production line, scrap and excess materials are often put through a granulating process that reduces the size of the scrap to a size that can recycled and turned into plastic pellets, shipped to compounders and used for new products.

One of the many benefits ACE customers can take advantage of is the cost-savings and convenience of partnering with a single source that can provide for all of their cutting operation's need from one warehouse location.

Improved communications with sources that are located in multiple countries around the globe provides an opportunity for the American Cutting Edge manufacturing operation to find the highest quality materials and the best price. This sourcing methodology also mitigates the risks of stock-outs on products due to circumstances beyond anyone's control.

According to Plastics Recycling product manager, Lynn Harville, Because American Cutting Edge has such strong global supply chain relationships, not only are we able to provide better pricing than the OEM, we're also in a better position to have product on our shelves, ready to ship when customers need it. One of the great ACE advantages is that our entire company history is in industrial knife manufacturing. We have the technical knowledge, experience, product availability, and ability to provide everything an operation needs for every cut on the production line whether it's pelletizing virgin materials, converting and slitting plastics, or recycling it at the end of the line.

Having access to a number of vendors in different areas of the world allows organizations to mitigate the risks when circumstances happen that are just beyond anyone's control. A solid example of this can be found in the port closures in 2020 during the global pandemic. At ACE, we were grateful to have solid relationships that allowed a level of transparency that enabled us to keep our finger on the pulse of what was happening with shipments around the world. The variety of countries we work with on a regular basis allowed us to make sure that our customers experienced minimal stock-out situations during this time with no additional expense to get product air-lifted to meet demand.

Contact us to put the industrial knife manufacturing experts at American Cutting Edge to work for you today and take advantage of benefit and knowledge of our entire operation.