The traditional relationship between suppliers and customers has typically been a Hobbesian, eat-or-be-eaten rule of the jungle arrangement. Robert Porter Lynch wants you to know that it doesn’t have to be that way.
In fact, the most productive arrangements are where the supplier and the customer trust and communicate with each other with both parties winning through increased innovation. Lynch, a productivity and management consultant is laser-focused on helping other companies improve themselves by turning their supply chain into an engine of competitive innovation.
“I rarely use the word productivity. Not that I’m against the word but I’m far more interested in collaboration, innovation and transformation,” says Lynch.
He wants companies and people that participate in his seminars to identify their strategic suppliers and figure out how do to get innovation to flow from those particular suppliers to create a competitive advantage for their ultimate consumer.
“Once they get it, everyone starts to shift the way they think and the way they operate, and then they start to gain competitive advantage.”
Cougar Tools provided a real-world example of this kind of innovative thinking. The company makes downhole tools with fanciful names like shark’s jaws and mud mounters for conventional oil and gas drillers. They brought along two suppliers to a recent two-day seminar led by Lynch that was put on by Productivity Alberta.
Gary Spencer is the manufacturing manager at Cougar Tools and while the lessons learned may have been simple they were certainly powerful.
“Starting a dialogue is the biggest thing that I picked up. We never really talked with suppliers. We tried to screw them on prices if anything,” says Spencer. “Now we’re looking at alliances with suppliers, because they can help us improve our company.”
The suppliers that Cougar brought along represented the beginning and the end of their manufacturing chain. Continental Alloys and Services provides the raw steel while McCoy Coatings applies the final metallic coat to the products to make them last in their harsh environments.
Eleanor Ferguson is senior manager of business development at McCoy Coatings. An immediate strategic alliance that was implemented right after the seminar was that McCoy now pre-schedules all of their work for Cougar.
With McCoy as the last step in a very long chain the product typically gets plopped on their doorstep without any notice. It doesn’t get scheduled into the system until the day it arrives which means long lead times for both the customer and an inefficient use of McCoy’s time as they struggle to effectively deploy their staff. McCoy and Cougar will now communicate when new projects are coming and McCoy can allocate the time and labour for the project ahead of time. This will improve Cougar’s lead-time and McCoy’s allocation of labour resources.
Ferguson repeats the refrain from Gary Spencer on the importance of dialogue between supply chain partners.
“The big thing we took away was that we needed to improve our communication. That was the single biggest thing that hit us all. Through lack of communication we weren’t really getting what each of us required and as a supplier to Cougar having that conversation about what we could do to assist each other was great.”
This pre-scheduling program is now being built out for McCoy’s other strategic partners and Ferguson is already planning workshops with the shop floor workers and the sales staff on what she learned.
Gerry Valentijn is a sales manager with Continental Alloys & Services. Continental is a steel product distributor, a middleman between the steel mill and the customer. When a customer needs steel and they’re not in the position to purchase large volumes from steel mills Continental steps in.
Their relationship with Cougar Tools has been going on for the past 7 years. Their strategic supply chain alliance is fairly simple. Continental pre-buys and keep in stock certain products that Cougar Tools needs in order for them to be able to smooth out their manufacturing process. They’re both very happy with the arrangement
“It was a good refresher to not get stuck in a rut and apply similar scenarios to other customers. We’re not doing this just with Cougar Tools we’re applying it to a few more customers, where it makes sense,” says Valentijn.
