Earlier this week, I was in Denmark, speaking at a conference around the theme of Supplier Collaboration and Strategic Supplier Relationship Management. About 130 people showed up and were listening quite carefully at what the speakers, myself included, were speaking about. Many of them told me they still had a very adversarial relationship with their suppliers however. One of the speakers, a professor from a university close to Detroit, demonstrated the difference in supplier perception in the US automotive industry between the 3 US majors and Toyota, Honda and Nissan. The results were stunning, and guess what, there is a clear correlation between profitability and the perception.
Obviously you will argue that having good relationships with suppliers is by far not the only factor that will play in the profitability of a company, and obviously you are right. But the fact there is this correlation really makes me wonder why not more companies are jumping on the bandwagon. What is it that stops them doing so?
One thought daunted on me while listening to him and
to others. As listed companies, we are focused on the short term. In my company, we jokingly say that the long term is the end of the quarter. Transforming a relationship from an adversarial to a collaborative one takes time as trust needs to be built between the organizations. That is not done overnight, so, is it the long term nature of the effort that hinders companies to jump onto the bandwagon? Could well be. I would understand that if large initial investments were required, but frankly, most often that is not the case. So, should American and European companies wait till they completely outmaneuvered by Japanese ones before taking action? I would definitely not do that if I were in their shoes. How long does it actually takes to find the Holy Grail?
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