There has always been and will be conflict in the supply chain, no matter what industry is in question. 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.

One result that is proven to be true for years is the supply chaing partner relationship that is strenghten by good communication, according to research. 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. It’s just crazy, nothing more.

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. Home Depot and Dell Computers have also built powerful alliances with their suppliers for cost saving just-in-time inventory in similar applications. 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. The highest priorityis to promptly respond to any complaints and conflicts that arise. This is the bet way to earn loyalty and build trust in the strategy which will bring great results.

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