Reprinted from SUPPLY CHAIN DIGEST, August 28, 2008
Expert Insight: Supply Chain InView by Ann Drake
Logistics News: Open Book Partnerships between Logistics Service Providers/3PLs and Clients
Sharing Information is Hard for Some Companies, but Key to Continuous Improvement
At the best of times – and at the worst of times – the quality of a partnership between two companies can make a huge difference. Recently, when a natural disaster struck at one of our facilities, our strong relationship with our customer enabled us to respond with immediacy and unity.
How are such relationships forged? The bond begins when two companies have compatible cultures – where the values and priorities are well aligned. The rest comes through hard work, aimed at establishing trust – a process involving sharing each partner’s financial and operational ideas, concerns, objectives and struggles. When two companies act as true partners, both are able to achieve their business goals more effectively and in less time than in a vendor/customer arrangement.
Some call this an “Open Book” partnership. I asked another of our customers what they saw as the benefit of the open-ness of our partnership. This customer said that as a large company with a long history of success, their approach to partnerships had basically been close-minded. By “opening up” with us, the hand-in-hand partnership has helped them gain a fresh perspective about how their decisions impact cost and service trade-offs. The relationship also helped them identify internal improvements by encouraging them to ask, “Why do we do that? We’re asking you to do this, but why?”
This customer continued, “Now that we are outsourcing, we show all costs: where, when and why. We are now able to identify our own inefficiencies rather than cover them up. Working together as we do has helped us understand our own business in a new and inventive way.”
Relationships Based on Trust
Trust is the key - and trust builds by being open and honest when things are good and not so good, delivering on what is promised, pro-actively resolving and notifying the customer of problems, and identifying new and better ways the customer can do things within their own organization.
Some customers are reluctant to share such items as current costs, planned costs, internal challenges, and internal decisions. They may feel that these particulars have nothing to do with the supply chain. But what we all know now to be true is this: Every aspect of the business can affect the supply chain – and the supply chain is likely to impact the overall ability of the company to achieve its business goals.
© Copyright Supply Chain Digest. August 28, 2008. All rights reserved.
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