Top 3 Roadblocks to Supplier Collaboration
Collaboration is quickly changing the way we live. We collaborate to find the best route to work via Waze, to find the best place to eat via Yelp or to find a cheaper and perhaps more interesting place to vacation via Airbnb. Supplier managers I speak with are eager to get the benefits of more collaboration at work with their key suppliers and stakeholders. In practice, several common problems are holding them back. Here are the major roadblocks to more effective supplier collaboration along with suggestions on how to breakthrough.
Roadblock #1: Company culture
Over the last 17 years, my consulting clients have typically been large manufacturing companies in the United States, Europe, and Japan. These organizations tend to be complex, hierarchical, slow to embrace change, and risk averse. This isn’t like working at Facebook or Google. Many of their large global suppliers are similarly challenged.
Breakthrough practice: Leadership must embrace collaboration and demonstrate with words and actions that collaboration is a key business strategy. One example might be hosting an annual forum for strategic suppliers to join, mingle and brainstorm improvement ideas. All suppliers have opinions on how to improve your business, but they are rarely asked for them.
Roadblock #2: Lack of time to collaborate
One client summed up the situation at her company as follows, “We have many great ideas but it takes people’s time to make them work. There are many ongoing initiatives and unfortunately it's always the same people working on all of them.”
Breakthrough practice: Emerging collaboration technology presents an opportunity to enhance supply management productivity and enable greater collaboration. The now traditional suite of spend analysis, sourcing and contract management tools are useful. But like our old Garmin GPS devices, they lack real-time input from other drivers about traffic conditions ahead. We save time when we use Waze to avoid a traffic jam or Yelp to quickly find a restaurant. The right collaboration tools can help supply managers avoid potential hazards in real-time.
Roadblock #3: Lack of information
Market conditions are dynamic and risk exists tomorrow where it did not exist yesterday. One client of mine was caught off guard when a rotating equipment manufacturer that had been serving them well for decades suddenly couldn’t meet delivery dates. To make matters worse, some sites in other regions were placing orders with this supplier months after delays were already appearing at sister plants. From the perspective of the corporation as a whole, we have critical supplier information such as previous sourcing results, past issues and resolutions, and prior risk analyses. But from the perspective of an individual supply manager, this information is siloed in many separate systems they may or may not have direct access to.
Breakthrough practice: Adopt a supplier collaboration platform that has the social features that we have grown accustomed to on Facebook and LinkedIn. Just as my cousin doesn’t have to send the latest pictures of her kids directly to me, a site buyer placing orders for rotating equipment can learn about supplier issues being experienced by other sites because she “follows” key suppliers in the rotating equipment space.
The future presents continued challenges related to globalization, time commitments and information hurdles. But strong leadership and new technology are about to change the supply management function for the better yet again.
About the writer: Sean Harley is the founder and CEO of LUPR Inc. - A collaboration platform aiding procurement in global enterprises.