Supply Management magazine recently ran a couple of stories that related to supplier collaboration. Each was based around a CPO\u2019s approach to supplier collaboration.<\/p>\n
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And these two CPO\u2019s seemed to have polar opposite approaches to supplier collaboration.<\/p>\n
First, my attention was drawn to a headline on the cover of the July 3, 2008 edition that read \u201cBT\u2019s message to suppliers.\u201d I thought that this could feature some fun-to-quote tough talk.<\/p>\n
And I wasn\u2019t disappointed.<\/p>\n
The article \u2013 which was entitled \u201cBT to halt supplier \u2018gravy train\u2019\u201d (Membership required. Man, I love that title!) \u2013 begins by saying \u201cBT will not renew contracts with long-standing suppliers that are not prepared to collaborate as the company overhauls its purchasing processes.\u201d Then, it quotes BT CPO Neil Rogers as saying:<\/p>\n
\u201cSome people in the past have got into BT and ridden the gravy train because we\u2019ve not been joined up and have not been strong enough. I can see where those deals are and over time I\u2019ll break them. Some suppliers see their quarterly sales targets as being the way to behave, and it isn\u2019t, so we\u2019ll change that over time\u2026They think we can\u2019t shift them \u2013 well, we will.\u201d<\/em><\/p>\n The article says that Rogers wants to dispose of \u201cold-fashioned\u201d procurement relationships and build partnerships with suppliers. But then, while discussing how he personally gauges supplier interest in partnering, Rogers says \u201cYou have to see it in the way that people respond to your pushes, challenges, and demands.\u201d<\/p>\n Let\u2019s contrast that with an article that was in the June 19, 2008 edition. This article, entitled \u201cChanging Up A Gear,\u201d talked about how Chrysler was making changes to embrace greater supplier collaboration. Some quotes from Chrysler CPO John Campi seem to illuminate a different paradigm of supplier collaboration. He says:<\/p>\n \u201cThe first thing Chrysler needs to do is regain trust and engagement with the supply base. Over a number of years, we have lost the kind of relationship with key suppliers, the kind of partnership activity absolutely necessary to enable real growth for both organisations.\u201d<\/em><\/p>\n Will Campi want to see how his suppliers respond to \u201cpushes\u201d and \u201cdemands\u201d the way that Rogers does? These words of his may shed some light:<\/p>\n \u201cAny company that abuses a supplier is destined for failure, because it\u2019s only with those key suppliers that you\u2019re able to really make progress. It is extremely expensive to change a supplier; there\u2019s a tremendous amount of risk involved. I would much rather work with suppliers that we have a history with, and have a positive relationship with, than anyone else. It not only makes my job easier, but it makes our products better because our supply base understands what we are trying to do. Now if you destroy the trust in the supply base, which I believe has been done, then you have a contentious relationship and you can get to the point where each party is trying desperately to take advantage of their opponent, rather than looking at them as their partner.\u201d<\/em><\/p>\n He goes on to say that a savings sharing strategy (much like the one taught in the online class \u201cSavings Strategy Development\u201c) is the basis for his philosophy and, in contrast to putting pressure on suppliers to reduce price, is \u201ccertainly a more appropriate demonstration of our desire to be collaborative.\u201d<\/p>\n My personal opinion is that a \u201cwin-win\u201d disposition is at the heart of successful supplier collaboration. That requires a recognition of each party\u2019s interests and working together to help each other satisfy their interests.<\/p>\n If \u201cquarterly sales targets\u201d are of interest to a supplier, a CPO should ask the question \u201cHow can we help you achieve your quarterly sales targets while helping us achieve savings\/better delivery\/better quality\/etc.?\u201d I don\u2019t think that you can have true collaboration without acknowledging the importance of the other party\u2019s interests.<\/p>\n That\u2019s not to say that there isn\u2019t room for tough talk with suppliers \u2013 there is \u2013 just that maybe it shouldn\u2019t be called collaboration.<\/p>\n So what are your thoughts? Are these CPO\u2019s definitions of collaboration two sides of the same coin? Or is only one a true representation of collaboration?<\/p>\n","protected":false},"excerpt":{"rendered":" Supply Management magazine recently ran a couple of stories that […]<\/p>\n","protected":false},"author":12,"featured_media":3995,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2497","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\n