Collaboration along the supply chain injects a steady flow of new ideas and solutions — key drivers in the quest for bottom line
At the APICS 2014 International Conference, one of the keynote speakers was a futurist. He talked about the importance of a collaborative platform. I say – finally! I still remember one of my colleagues who questioned me about my articles about collaboration; not because he didn’t agree (as he is the collaboration guru in Purchasing and supplier management) but because he wondered if I had clients who actually believed in collaboration.
Collaboration will drive bottom line business results. If you look at collaboration as a way to combine 1+1 = 99, you’ll achieve dramatic improvements and happier employees and supply chain partners.
For example, at PaperPak, we collaborated with customers and suppliers in order to design new materials and new products that achieved a “win-win-win” – better product performance for the customer, better cost structure for us, and an innovative new material for our supplier. It led to over a million dollars in savings.
There are a few strategies to ensure success with collaboration: 1) Avoid being a know-it-all 2) Seek out diversity. 3) Look for the “and”
#1) Avoid being a know-it-all: Lately I’ve been working on several different projects. It’s interesting how much more successful the project results are for those projects where the leader believes in collaboration than those where the leader “thinks he/she knows”. Even good, smart people fall into the trap of thinking they already know and devaluing input from those who might be in lower positions. A key to the dramatic results I help clients achieve is to listen for and find those people with good ideas who are being ignored. Unfortunately, it is easy to do in the vast majority of clients.
For example, I remember one medium-sized manufacturing client who wanted to fire one of their only experts with knowledge on a few topic areas because his value seemed unclear. Luckily I convinced them to keep him, and he went on to be an integral team member on one of our improvement projects that delivered not only critical customer performance improvement but also millions of dollars of margin improvement.
#2) Seek out diversity: Look for people with different strengths to collaborate with. It might be more natural to look for people more similar to you and who you prefer to spend time with; however, if you find folks who can add value in areas where you are weak and vice-versa, you’ll deliver substantial results.
For example, in a middle-market, value-add distributor client, we developed a cross-functional team with participants from all sites. There were several different personalities and strengths in the room; however, the result was a 30% reduction in inventory levels which freed up millions of dollars of cash.
#3) Look for the “and”: One of the best ways to create a collaborative environment is to provide typically “either” “or” situations and ask the group to look for a way to achieve both. I find that stretch goals spur out of the box thinking and interactive discussion.
For example, on several client projects, I’ve helped my clients find ways to reduce inventory levels by millions of dollars while improving service. Typically, this can be thought of as an either-or equation as if you have inventory to cover potential sales, you will likely increase service levels; however, we created an “and” by freeing up cash and improving our service levels by having the “right” inventory in place.
Collaboration is no longer a fluffy concept; it will drive accelerated cash flow, improved margins and business value and sales growth.