and the utilization of GFS’s transportation fleet to return
pieces of obsolete equipment (waffle makers) from the
restaurants to the equipment manufacturer. In addition,
restaurant managers were given the flexibility to buy
directly from GFS’s retail stores when there was an urgent
need for an ingredient.
The BEF and GFS experience confirms the
potential benefits of using The Collaboration
Two additional collaboration meetings
have been conducted between BEF and
GFS since the first meeting in March
2011. The second collaboration meeting
was held 21 months later, in December 2012,
and the third took place 22 months after the second one, in
October 2014. The follow-up meetings were held for two
reasons: ( 1) in both companies there had been a number of
changes in the members of the cross-functional teams that
supported the relationship, and management believed that
the new members would benefit from the experience; and
( 2) although the teams were identifying new opportunities
while they worked together to implement the initiatives
that had been identified in the first collaboration meeting,
management believed that this was not a substitute for a
focused, one-day meeting where each company’s drivers
were identified and joint plans developed. Based on this
experience, we would suggest that for key relationships, a
collaboration meeting be held every 18 to 24 months.
CREATING MUTUALLY PROFITABLE RELATIONSHIPS
Faced with increased pressure to reduce costs and improve
revenues, managers are looking for opportunities to co-cre-
ate value with key customers and suppliers. Opportunities
for value co-creation in business relationships arise when
the capabilities and knowledge that exist within each com-
pany’s organization are leveraged through cross-functional,
cross-firm teams. However, because implementing those
teams requires a substantial amount of time, effort, and
resources on the part of all involved, cross-functional rela-
tionships are economically viable only with customers and
suppliers where a high potential for value co-creation can
be demonstrated.
To identify the key relationships where cross-function-
al teams should be created, customers and suppliers
need to be segmented as part of the implementation
of customer relationship management (CRM) and
supplier relationship management (SRM) processes.
Segmentation and resource-commitment decisions
should be based on financial measurements that cap-
ture the value each customer and supplier helps to
co-create.
In this article, we showed how The
Collaboration Framework enables
cross-functional, cross-firm teams to
co-create value that can be measured in
financial terms. BEF and GFS used The
Collaboration Framework to structure a
lasting and mutually successful business
relationship. In four years, the combined
profits before taxes achieved for the two
companies was more than $31 million.
Each year, the target set by management was
exceeded, and the two companies expect that the profit
contribution will continue to increase.
The collaboration has been highly successful, and executives at the two companies expect that the benefits of value
co-creation will continue to accrue. For that reason, both
BEF and GFS are using The Collaboration Framework
to structure other key relationships. As this example has
shown, the concept of value co-creation represents the next
level of development for customer-supplier relationships. c
Note:
1. All monetary figures in this article are in U.S. dollars.
This article is adapted from Douglas M. Lambert, editor, Supply Chain Management: Processes, Partnerships,
Performance, 4th edition (Ponte Vedra Beach, Florida:
Supply Chain Management Institute, 2014), Chapters
16 and 17. Copyright 2014, Supply Chain Management
Institute. Used with permission. For more information see:
www.scm-institute.org.
DOUGLAS M. LAMBERT, PH.D., IS THE RAYMOND E. MASON
CHAIR AND DIRECTOR OF THE GLOBAL SUPPLY CHAIN
FORUM, THE OHIO STATE UNIVERSITY. MATIAS G. ENZ,
PH.D., IS AN ASSISTANT PROFESSOR AT UNIVERSIDAD
NACIONAL DE ROSARIO (ARGENTINA).
