DC Velocity - September 2015

Q You are a strong advocate of end-to-end supply chain collaborative processes. What do you mean by true collaboration in the supply chain and why is that important?

A It really is about understanding what each other needs to be successful and providing that. Sometimes, customers don’t know there are some better options or, I will say, better opportunities. These may be cheaper or they may be more expensive, but there are better ways of doing it. So, understanding is the first step. You can provide what they really need to be successful, and not just what they want.

I do believe customers will value your solution if they understand that you are 1) being truthful, and 2) thinking about what makes them successful versus selling. Sometimes, selling is just saying yes and providing a product they really don’t need or is really not right for them. Our value proposition actually delivers a lot more value for them in meeting their customer goals. It is not about always saying yes.

QLet me ask you to look back upstream. Give me your view of what collaboration means with your suppliers.

A Well, the first step is developing a common understanding of what we need to be successful
and how the supplier can help me. I share with my
suppliers our customers’ expectations, everything
from leadtimes to bottom-line dollars. What I have
done is use this “common goals” format, where I
incorporate these key indicators in our metrics and
they see exactly what I am doing. Then we have a
review. I do this every quarter.

Just like a good employee or team member, you are really aware all the time and there are no surprises and you are working on it together. It is a cooperative venture versus saying, “Now give me a 5-percent reduction in price.” I believe that common goals actually create a lot more value than just a price proposition. By doing this with our suppliers, you develop a long-term relationship and you develop a trust with your suppliers.

Q How do you build trust with both your custom- ers and your suppliers? A That is probably the hardest thing and yet the asiest thing—the hardest thing to start but the easiest thing to maintain once you have laid the foundation. You have to expose your weaknesses. As a supplier, the hardest thing to tell your potential or current customers is that you have a weakness and you need help. That could be anything from not meeting the customers’ goals on timing to not having enough pieces to satisfy their demand. It could be that you can’t deal with this cost and here are the reasons why. It puts you in a little bit of a vulnerable spot, certainly, and most people don’t want to share their weaknesses.

The other side of it, however, once you do commit, you can then say to the customer, “This is what I can do, and I can guarantee 100 percent success.” You then have to deliver exactly what you committed to. I think the customers will value that because you’re going to be delivering exactly what you said you would. There are no surprises. For the long term, the customer and the supplier both believe what you are saying because it is very transparent.