No matter the industry, there has always been conflict in the supply chain. And I believe that will continue to be true in the future too. More times than I can remember, I have presented my keynote presentation titled, The New Era of Manufacturer/Distributor Cooperation at either manufacturing or distribution association meetings.

In doing my research for these presentations, the supply chain partners usually claim that they communicate well with each other. But, that is rarely the case. With communication and collaborative relationship, all partners will definitely improve.

To build efficient and productive relationship with any supply chain partner, important thing that will definitely help to improve the level of communication is an ability to understand a value that your supply chain partner has to receive from that relationship. As an example, your procurement department might believe that your supply partner should cut their price so low that they no longer make a profit. And that is just ridiculous.

If you make an effort to understand the total value your supply partner needs and help them to receive that total value package, they will perceive you as a great partner and communication will become easier. It is best to put the energies you have at disposal into activities, services and similar tasks that will provide the value your strategic partner needs, but you should not give away the bank.

Improvements of the Supply Chain

Just-in-time inventory purchasing and supplying as exemplified by the famous relationship between Wal-Mart and Procter & Gamble has continued to prove successful. Another example are Dell Computers and Home Depot that have built a strong strategic alliance with the justi-in-time inventory that is so much cost saving. You could also apply this in your business. You can develop closer relationships with your supply chain partners.

It is important to share the same strategy with your partner. Conflicts and complaints must be of highest priority and promptly responded to. It is one of the best ways to improve the trust and build up loyalty betwenn you and your strategic partner.

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