Taking a total view [supply chain management]

Without any fundamental changes to the way the shared process between the customer and supplier is managed, there is a limit to how much margin can be squeezed to achieve lean production. There is now growing evidence that successive raids on margins are beginning to have a seriously damaging and even perverse effect on supplier performance. The path beyond margin squeezing is to provide leadership from the customer to take responsibility for reshaping its entire supplier base and for building deeper relationships with fewer suppliers, each with a deeper knowledge to enable them to solve bigger problems on a continuing basis.