Smart opens with a bang

US expert confirms collaboration is the key to financial benefit as this year’s Smart Conference kicks off in Sydney

Smart opens with a bang
Smart opens with a bang

By Anna Game-Lopata | June 26, 2013

Keynote speaker Dr Doug Lambert, from Ohio University in the United States this morning told over 200 industry practitioners supply chain management is not about logistics, procurement, transport or a combination.

Lambert, founder and Chair of the Global Supply Chain Forum at Ohio University's Fisher
College of Business says supply chain management is about the management of relationships.

He says research members of the Forum, formed in 1992, which included corporations such as McDonalds, AT&T, Coca-Cola
and Johnson
& Johnson were driven by the need to effectively undertake collaborative relationships.

"What we found was that while some companies had good business relationships they were not partnerships," Dr Lambert says.

"You don’t need partnerships to get good business results and that’s a good thing because you don’t have the human resources to partner with everyone."

The Forum, utilising a sophisticated interviewing process to ascertain what was on the mind of business partners found they were often at odds in terms understanding the nature
of and
expectations for the arrangement.

"The problem is we’re using one word to describe different relationships," Lambert says.

Lambert has therefore devised a collaboration framework to define the different levels of partnership a business would like to aim for with its suppliers and providers.

As part of this research, Lambert says cross functional teamwork has emerged as the most beneficial method of undertaking collaborative partnerships between enterprises.

"Most of the Forum members said the problem in their companies is they are stuck in silence," Lambert says.

"People can perform well in a silo and not do what’s customer friendly or shareholder friendly."

"We don’t pay the sales people for how much profit they bring to the company we pay them for how much they sell."

Lambert says the traditional sales role as a way to manage deeper critical relationships with key stakeholders in so longer viable.

"We can no longer beat suppliers up like General Motors did; beating up suppliers didn’t work for General Motors and it won’t work for Michael Dell either," he says.

"We’ve got to get to a point where the only way I win is by you losing."

"We think the links in the chain are the seller’s customer relationship management process linioing up with the buyer’s supplier relationship management process."

Lambert points to research undertaken by his PhD student which
investigated the relationship
Ohio-based food outlet the Bob Evans Family Diner had with two suppliers.

The first supplier utilised cross functional teams from a variety of business functions to enable ideas for mutual innovation and cost savings.

Meanwhile the second supplier stuck to the traditional sales model.

By the end of the research project the second supplier had lost its contract with Bob Evans after dropping from $16 million to $5 million in 2011 over the US recession.

By contrast the first supplier, who had contributed to many aspects of the Bob Evans business including redesigning menus during the downturn, had increased the value of its business with the diner from approximately $18 million in 2008 to $25 million in 2011.

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