The CEO of Pal’s Sudden Service, a privately-owned quick-service restaurant chain that won a Malcolm Baldrige National Quality Award in 2001, explains supplier development.
‘They said a lot of the companies, given their size, can’t have any influence or major impact on their suppliers. And we told the people at NIST, “That’s wrong.”
We have a major influence on our suppliers. The first piece of “assess and improve” that we did was in the category of supplier relationships. We were in a situation where we had multiple suppliers. We had a redundancy factor. We also had competitive bidding going on. By using the criteria to assess and then going out and saying, “What are the best-known methods, and what are we doing?” we went from 21 suppliers to four. Our cost of goods reduced by 10 percent, which all dropped to the bottom line.’