Middle market research highlights keys to being the “perfect link” in the supply chain

The largest and fastest-growing middle market firms with successful supply chains develop deep, collaborative relationships with their most important customers, according to new research from The National Center for the Middle Market (NCMM).

“To become the perfect link in the supply chain, firms need to narrow their focus to one or two key customers, use third-party logistics providers (3PLs), and consider sharing ideas with peers by joining a supplier council,” according to NCMM executive director Thomas A. Stewart.

The research indicates most successful middle market customers minimize diversity in their customer base and instead focus their efforts on a few noteworthy customers. These supply chain links create critically important partnerships, allowing them to make proper adjustments based on customer needs. In fact, the research shows that 34% of middle market firms rely heavily on just one or two critical customers compared to only 16% who are spread out over many different customers.

“As with customer relationships, supplier relationships are critical,” said NCMM managing director Doug Farren. “The best performing middle market companies’ work collaboratively with their top suppliers, often integrate business information systems, and recognize the value of 3PL partners.”

The research finds that about 53% of middle market businesses use 3PL to manage aspects of the supply chain, primarily transportation and warehousing.

A growing trend among larger firms in the middle market, along with those that are experiencing growth, has been to join supplier councils. About 40% of middle market firms participate in these groups, which help them learn best practices and collaborate on how to solve problems, as well as review metrics and key performance indicators.

For additional research data and infographics, including in-depth looks at regional variations, hiring/talent acquisition efforts and other business concerns among middle market companies, visit http://www.middlemarketcenter.org.

About the Survey
The National Center for the Middle Market surveyed 400 C-suite middle market leaders from companies that serve as supply links to other organizations that either sell direct to consumers or that perform additional manufacturing/assembly/distribution processes. All leaders surveyed have direct involvement in managing customer and supplier relationships for their firms.