Tuesday, February 12, 2008

Supplyside Agility

Relationships with suppliers can be organized in more than one way. For instance you could just buy certain components of the shelf. Or if you need a very specific component for your product or project you can gather the requirements and then create a formal RFP (Request for proposal) and invite potential suppliers to submit a bid for the work.

But there are many different factors to play with.

For instance if you have created an RFP there are still a lot of different ways how you work with your supplier. For instance you might decide that for a simple (software) component you specify the interface and a number of tests. These might be functional tests only, or they might also include non-functional tests such as performance or load tests. Then you invite different suppliers to bid on that work and based on criteria such as cost, speed, reliability, etc. you commission the work with a particular supplier.

A different option for the same type of work could be that you slice your system or product in such a way that a development partner becomes responsible for an entire functional area. This responsibility would include not only the implementation but also the testing, the user interface design, and the performance engineering. The development partner might also be required to acquire sufficient domain knowledge for that functional area.

Regardless which option you choose, the more options you have the better you can tailor the setup to your needs. Or in other words you adapt the working relationship according to the type of work, the type of supplier, and possibly other factors. Some work you might even consider to put on a site like RentACoder or similar. Other, more complex work you would either do in-house to preserve the capability or to protect your intellectual property.

The more options you have at your disposal, the more adaptible you are, the more agile you will be and the more likely your project to be successful. Agility is not only about JUnit or XP or Scrum. Agile principles can and should be applied to all other areas of project management as well, including the supply side.

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