Transparency, Trust, and Collaboration in Supply Chain Management
March Industry Roundup
A roundup of late 2014 supply chain articles highlights the industry trend toward “transparency” across supply chain management operations – transparency across the operation AND transparency in buyer/supplier or buyer/provider relationships. Thought leaders across the spectrum found it a worthy topic for consideration, from the data-driven Procurement Leaders/Ariba whitepaper “Collaborative Supplier Networks” with the opening advice to CPOs that “where old -style procurement can cut costs, collaborative procurement can add value,” to Phil Fersht’s pointed blog post “Why we need to stop boring ourselves to death and focus on what really matters: building TRUST” in which he claimed trust as “the biggest disruptive trend on the horizon.” We even had our own take in the LogicSource Idea Lounge, with COO Bruce Walton’s advice to buyers and suppliers to “embrace the counter-intuitive truths” of collaborative relationships in his blog post Aligning the Interests of Buyers and Suppliers. While each piece came at the topic from a slightly different angle, they all had a common theme – transparency and collaboration lead to the best business results.
Should this truth of relationship management be an “aha” moment for us? In business, most of us have learned that it’s wisest to keep intentions close to the vest – giving away too much might signal weakness, or worse, be used against us to block a desired outcome. How do we stop our cynical sides from scoffing at anything that smacks of “touchy-feely” or Kumbaya? If it’s not as easy as appealing to our better selves, then perhaps it is as simple as placing a dollar sign before it. Assign a significant, value-based outcome to managing relationships and it becomes clear – collaboration, trust and transparency do “pay.”
At LogicSource, we count transparency as one of the four key principles of our business model. If it were simple, or always intuitive, then it’s unlikely deliberately building it into every aspect of our business would have been necessary. We realized early on that our success, and the resultant success of our client’s businesses, depended in large part on trust and collaboration. To ensure we approached each new opportunity with that understanding in mind, we inserted it into our everyday language – made it something we speak about internally and externally on a daily basis. And it’s not lip service – it’s a way of doing business that leads to dramatic results. Consider these instances:
- During the LogicSource Mutual Value Assessment, we work in tandem with the client at every step – building baselines, mapping process, developing RFPs, selecting suppliers and designing the proposed solution The client sees the savings we have identified, the components that make up our business model – everything. What if they didn’t? What if we found savings with a supplier, only to find out later the client has a history with them that is negative? Our progress would be delayed and trust eroded. The impact could be even greater, with financial outcomes less than expected. Our transparent, lockstep approach means projects move quickly, smoothly and with greater financial benefit.
- Once we are working at “steady state” with a client, the transparency doesn’t abate. Our clients have made high level financial decisions and set strategic goals based on savings and value promised by our program. We work with our client directly to manage change and monitor the program in real time, conduct Quarterly Business Review sessions, share macro and micro-level reporting on a weekly basis, and can speak to savings committed vs. delivered on demand. Financial leaders rest easy knowing they won’t encounter last minute surprises that could damage their ability to report on fiscal outcomes, and business leaders remain confident that their strategic initiatives won’t be sidetracked or derailed by unplanned for changes or events.
In each case, it’s easy to see that anything other than transparency would have hampered success and eroded trust. Inserting ourselves between a client and their suppliers would create an unavoidable level of opacity that would ultimately degrade the trust that is essential to a strong, productive partnership. It’s a practice we will always avoid. Our unwavering commitment to ensuring our clients know everything that we know will remain a fundamental value that drives every aspect of our business. So far, it’s serving us well in the form of strong client relationships, optimal savings results and greater long-term value.
Sometimes being transparent means taking a risk that the person on the other side of the table will respond in kind. Motherhood and apple pie? Maybe. Good business? Always.
For more on Transparency as a LogicSource business value, click here for CEO David Pennino’s explanation.
Tags: Transparency, Supply Chain