Roll Video: What They Don't Teach in Vendor Management School

Every industry is different, so suppliers must be agile and flexible in their ability to meet the demands of their clients. That was the message driven home by Prem Shanker and Robert Chojnacki who spoke on behalf of Southwest Airlines at Nearshore Nexus 2016.
Shanker, Southwest’s Senior Buyer, Supply Chain Management, explained that companies benefit from being very open with their suppliers, building relationships that help reduce costs, increase contract value, and reduce risk. “We don’t just look at meeting with top-level execs; when we started nearshoring, we met with middle level folks, and the folks that actually do the work,” he said.
Through an in-depth supply chain gap analysis, the company has found areas where it is totally exposed. For instance, Southwest relies on its pilot training simulators to keep aircraft in the air, so needs suppliers who can meet their demands when things go awry. “Service interruption is not acceptable for us, which is also the message we give to our suppliers: we have to trust that they will help us avoid this issue,” said Chojnacki, the company’s Senior Supplier Performance Manager.
The company prefers suppliers that can send parts on time based on an initial forecast and business review. “My favorite suppliers are the ones I don’t have to talk to,” said Chojnacki. “It’s the ones that are on my radar all the time that consistently disappoint.”
In closing, Shanker gave suppliers a strong message: “It’s really important for Southwest Airlines to be understood by a supplier before the sale pitch is made, because if the cultural appreciation is not there, it would be like speaking in two different languages.”
The highlights of the Southwest Airlines presentation can be viewed above, or by clicking here.