Collaborate, Collaborate, Collaborate, Collaborate
Collaborate, Collaborate, Collaborate, Collaborate
Collaborate, Collaborate, Collaborate, Collaborate
Collaborate, Collaborate, Collaborate, Collaborate
I said before that Collaboration is Key and then I said Collaboration is Key again. And now I’m shouting it, backed up by a chorus.
In the past few months, a barrage of articles have surfaced on the Inside Supply Management, CPO Agenda, Supply & Demand Chain Executive, European Leaders Network, and Knowledge @ Wharton publication websites promoting the benefits of collaboration.
According to the article Supply Is Where It’s At published in Inside Supply Management back in October, new forms of supplier collaboration are some of the last strategic forms of competitiveness left to exploit. Buyers should consider going back to the drawing board with supplier quality training, meetings of the mind, and “new” old approaches that fight price inflation and promote supply reliability tactics like those last used in the seventies. When you get right down to it, do you really want to be the next Ford or GM?
The article also highlights three key points for continued growth:
- supply chain professionals need to enhance the organization’s overall performance, not perform narrow administrative buying services
- contributions must be measured across a spectrum that includes price, wider margins, lower overhead, reduced cycle times, faster time to market, reduced asset bases, and collaborative value
- supply chain professionals need to take the initiative to identify and seek mutual product or service enhancements and organizational performance improvement
The recent article Winning Together in CPO Agenda stresses that successful buyer-supplier partnerships require deep understanding and joint problem-solving and that it is collaborative partnerships that provide breakout results in procurement.
It also states that changing the classic approach requires a new paradigm that is based on concentrating efforts on making major improvements with a few, carefully selected, suppliers and on major development and transformation on a select set of smaller suppliers that have been identified as “high future potential” suppliers. Suppliers in the first group are usually large suppliers where improvements can be leveraged over large volumes and suppliers in the second group are typically good, low-cost production suppliers with restricted capacity, a high ambition to grow, and the right attitude.
The article puts forth a change management process that begins by selecting approximately five key suppliers and ends with agreements with your chosen suppliers that centers on shared objectives. The process contains the following five steps that are detailed in depth in the article:
- Visits/Interviews
- Questionnaire
- Network Mapping
- Summary
- 3rd-Party Facilitator Workshop
The article concludes by noting the very important point that the maxim “the customer is always right” is just not so, and, more importantly, that suppliers are often reluctant to tell customers when they are wrong or be the messengers of bad news. Lean supply chains require that all problems be identified, acknowledged and addressed. Moreover, when the customer is willing to admit that they are perhaps responsible for at least half of the problems, the authors have found that there is a significant increase in goodwill and enthusiasm for collaboration and joint efforts from the supplier.
The European Leaders Network published the outcomes of a recent SRM roundtable in their article The Reward for Good Relations which featured commentary from a number of industry professionals including Matthias Gramolla, Paul Lucas, David Marchant, Jim Robinson, Mark Simmons, and Phil Reeves. These commentators made a number of important insights that revolved around the importance of collaboration as a key tool to address supply risk management.
One of the key points in the article is that managing the health of the relationship is a bigger priority than managing the risks associated with the relationship – since this collaboration will allow you to identify, address, and solve problems much more quickly than in a relationship without collaboration. The partnership approach is critical, relationship skills are crucial, and success relies on an objective focus with clear roles, responsibilities and measurable goals.