While historically there has been a significant focus (rightly so) on processes and continuous improvement there is no getting away from the importance, for Supply Chain professionals, of people management skills.
Read the following sentence carefully:
Longer term close relationships deliver value (to both sides.)
That’s an important statement up there. Managed appropriately relationships between a buyer and his suppliers derive important value both monetary and strategically. Time for the next key sentence:
Relationships don’t just drive cost reduction.
While cost reduction is important it’s perhaps all too obvious route to go down. While many senior members of your organization may want to use relationship management to drive down cost superior supplier relationships do so much more.
Deeper value is derived through close collaboration, innovation flexibility and trust. Indeed, without adequate relationships in place, those benefits are unlikely to be forthcoming.
What types of relationships are there?
There are various types of relationships that can be had with suppliers – from adversarial, commercially driven ones where participants are kept at arm’s length to ones that are reflective of deeply committed strategic partnerships where business objectives and strategy are reflective of the relationship. And of course, there is everything in between.
Whilst business need (and action) are often what drives the nature of the relationship those participating in it can often set the tone and opportunities for success. Whilst it’s all well and good to talk about strategy and KPI’s it often comes down to key behaviors from senior participants in the relationship that set the way it will function.
Handled the wrong way with the wrong behaviours, it doesn’t matter how much time and effort you put in your likely to come away with little.
Supply chain relationship facilitators
As you’d expect, relationships don’t happen on their own and they need fostering. Relationship facilitators can be both participants and process.
As discussed above there needs to be a business need, a key driver in making the relationship happen but then this needs the right environment to grow.
An example of a simple but effective facilitation method is a regular business review. These things are common the world over, representatives of the buying/selling organization get together periodically to discuss the business, discuss issues, and talk about future work. This simple method of communication can be a powerful tone in that
· Senior representation underpins importance of action
· Provides a forum for both sides to be heard
· Re-enforces collaboration
This is but one of the countless tools at your disposal.
So what about your organization, does it value relationship management and development, how does it do it? We’d love to hear your feedback.