Latest / The Buyer's Side with Fexingo: Procurement, Sourcing, and B2B Purchasing Decisions / How a Buyer Used Supplier Mentoring to Cut Lead Times 40 Percent
Transcript
- Lucas: There's this assumption in procurement that if a supplier can't meet your lead times, you either beat them up on price or you qualify a second source. But a contract manufacturer I came across in Guadalajara tried something different last year. They sent two of their own procurement engineers to live at the supplier's facility for six weeks. Luna: Wait — they physically embedded their own people at the supplier? That's a serious investment in time and trust. Lucas: It was. The buyer, let's call them Electra Assemblies — roughly 120 million in revenue — depended on a single Mexican connector supplier for about 40 percent of their input. That supplier had lead times stretching to 18 weeks. Electra's own customers were demanding 10- to 12-week turnaround. So they had a choice: dual-source and spend months qualifying, or try to fix the bottleneck. Luna: And they chose fix. That is unusual. Most buyers see supplier capability as a black box — you don't open it, you just switch boxes. Lucas: Exactly. And Electra's VP of supply chain said the same thing — he told me, 'We kept assuming our supplier just couldn't get faster. But we never actually checked why.' So they embedded two engineers — one with lean manufacturing experience, one with demand forecasting — and gave them a very narrow mandate: figure out where the time goes. Luna: What did they find in those first days? Lucas: A lot. The supplier was running without any kind of pull system. They'd produce in massive batches because they thought it was efficient, but then those batches would sit in work-in-progress for weeks. The engineers mapped the flow and saw that actual processing time was only about 30 hours per order. The rest was queue time. So they introduced kanban — simple two-bin system, no software — and a basic 5S program to organize the floor. Luna: Two-bin kanban and 5S — that's lean manufacturing 101. But if the supplier didn't already have it, it suggests they were operating with very little process discipline. Lucas: Right. And the engineers also discovered the supplier was using a spreadsheet to forecast demand — manually updated once a month. So they helped them set up a simple moving-average forecast using the buyer's own historical orders, refreshed weekly. That alone cut the information lag from 30 days to 7. Luna: So the mentoring here was really about transferring basic operational capability. It wasn't about giving them money or equipment — it was about showing them how to manage flow. Lucas: That's the key. Electra didn't spend a peso on capital. They spent about 80 person-days of engineering time over 14 months. The supplier's lead time dropped from 18 weeks to 10.5 weeks. Defect rates fell 28 percent because the floor was cleaner and standard work was posted. And Electra negotiated a 6 percent price reduction, partly because the supplier's own costs dropped from less rework and less overtime. Luna: So the ROI on those 80 person-days is enormous. But I wonder — how do you approach a supplier and say, 'We want to come help you run your factory' without sounding like you're accusing them of incompetence? Lucas: The VP told me they framed it as a joint problem. They said, 'We need faster lead times to win business that benefits both of us. Let's figure out where the bottleneck is together.' They offered the engineers as a resource, not as an audit. And they made it clear that any productivity gains would be shared — the supplier kept the cost savings from reduced waste, and Electra got the lead time improvement. Luna: Shared upside. That's a very different dynamic from the typical buyer-supplier relationship, which is often adversarial over price. Lucas: Completely. And it's why most buyers don't try mentoring. They assume the supplier will resist or that the investment won't pay off. But the data from this case is pretty compelling. According to the company's internal tracking, the total cost of intervention was about 45,000 dollars in salary and travel. The annual savings from the price reduction alone was 180,000. Plus they avoided the cost and risk of qualifying a new supplier, which could have taken a year and cost 50 to 100 thousand. Luna: So payback in about three months. And they didn't have to train a new supplier on their specifications, build a relationship from scratch, or manage dual-sourcing complexity. Lucas: Right. And the supplier relationship actually strengthened. The supplier started proactively sharing their capacity data and early warnings about material shortages. That kind of transparency is rare when you're just a customer who applies pressure. Luna: I imagine not every supplier is receptive. What kinds of suppliers are good candidates for mentoring? Lucas: The VP had a rule of thumb. First, the supplier has to be strategically important — high spend, sole-source, or critical component. Second, they have to show willingness. If the supplier's management is defensive or thinks they know everything, it won't work. Third, the buyer needs internal capability — you need people who actually know lean or forecasting or quality. If you don't have that expertise, you can't mentor. Luna: So it's not a universal fix. But for a subset of suppliers, it seems like a high-leverage move that most procurement teams overlook. Lucas: Massively overlooked. I talked to a professor who studies buyer-supplier relationships, and she said that fewer than 10 percent of manufacturing buyers have ever deployed a formal mentoring program. Most procurement KPIs focus on cost reduction or payment terms — not on building supplier capability. But if you think about it, improving a supplier's capability reduces your risk, your lead time, and your cost base. It's probably the most durable source of savings you can create. Luna: And it's not just about manufacturing. I've seen similar mentoring in IT services, where a buyer trained a small software vendor on agile project management to improve delivery timelines. Lucas: That's exactly the same principle. The specific techniques change — it might be code review processes instead of kanban — but the core idea is the same: invest a little expertise upfront to unlock a lot of performance downstream. Luna: So for a buyer listening who wants to try this, what's the first step? Should they just pick one supplier and ask for a meeting? Lucas: The first step is internal. You need to identify which of your own people have the skills to mentor. Maybe it's a lean engineer, maybe it's a quality specialist. Then pick a supplier that's important and where you have a decent relationship. Frame the conversation around mutual benefit — not 'we're here to fix you' but 'we want to grow together.' Start small: one process, one line, one metric. Prove it works, then scale. Luna: And don't forget to measure the baseline. If you don't know your current lead time and defect rate, you can't prove the improvement. Lucas: Exactly. In the Electra case, they had 18 months of data before the intervention. That made the 40 percent reduction impossible to argue with. And that data helped them spread the practice to two more suppliers in the following year. Luna: It's almost like the buyer becomes a consultant. But with skin in the game. Lucas: And that's what makes it different from a consultant. You're not just giving advice and leaving. You're in the factory, you're living the problem, and you're sharing the risk. When it works, both sides win. Luna: Honestly, episodes like this where we dig into a real, replicable case — they take a lot of research and a lot of coffee. If today's conversation moved your thinking forward in some small way, you know where to find us. Lucas: Yeah, it's buy me a coffee dot com slash fexingo. That link helps us keep these episodes ad-free and focused on the actual numbers. No pressure — just an option if you found value. Luna: And the supplier mentoring case we walked through — I think the real takeaway is that sometimes the best procurement move isn't finding a new supplier, it's building the one you already have. Lucas: Agreed. And next episode, we'll look at a buyer who used modular design to reduce SKU complexity and cut sourcing costs by 22 percent. That one's a different lever, but same idea — work smarter, not just harder.