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Suspicious Beginnings

What causes mistrust in your supply chain?
  • Ron Crabtree
May/June 2011

In today’s constantly shifting business landscape, where the smallest differences separate the winners from the also-rans, there exists a crisis of confidence—and trust. As evidence of this, consider the following observations about the employees in our companies and the suppliers and customers we depend on to make our supply chains work.

Let’s begin by examining employees. According to Deloitte’s 2010 Ethics & Workplace Survey, “The recession has diminished two important forms of business currency—trust and ethics.” The survey found that, for employed Americans who plan to seek a new job when the economy stabilizes, 48 percent cited a loss of trust in their employers related to how the business was run over the last two years as a reason for leaving, and 46 percent cited a lack of transparent communication from leadership. Executives also named trust and transparency as leading factors in voluntary turnover in the coming months.

Supply chain management is all about building relationships and trust, in both the supplier-facing and customer-facing sides of an organization. It would help your bottom line if you could build higher levels of trust with employees, customers, and partners.

But there’s the rub: Most of your employees, customers, and partners don’t care about your bottom line. This can be problematic, because, as a stakeholder and leader in your organization, it is your job to make sure your bottom line is as strong as possible. Allow me to share with you some techniques to help you close this gap.

Understand your roots
Take an inclusive approach that focuses on root causes. Perform a self-assessment to explore the reasons behind the low levels of trust with your customers, employees, and partners. Ask yourself the following questions to rate your current situation.

Are you clear on what your customers want from your products or services? Do you know the top three improvements you can make this year to please them? If you perform poorly on this scale, then the support to deliver what customers want? If they ask you, “What’s in it for me?” can you answer compellingly?

To what degree do you engage and involve your suppliers and business partners in information sharing? What about in creating win-win scenarios and weighing risks and rewards for increased supply chain performance?

At the end of the day, the number one reason trust doesn’t exist between you and your employees, customers, and partners is that you lack the motivation to build it. I have facilitated hundreds of continuous improvement workshops involving thousands of people in many industries, including for-profit, nonprofit, and government operations. Participants included employees of my client’s companies and their direct and indirect suppliers and customers. Every one of these workshops has resulted in improving businesses—and building trust at the same time. I have seen companies save themselves from going out of business, create lasting relationships with labor unions, save multimillion-dollar contracts from the brink of non-renewal, and create relationships with vendors that changed their industries. And each of these companies accomplished this by creating a shared agenda with their employees, customers, and partners.

In the next installment of “Lean Culture,” I will approach the creation of that shared agenda, as well as how to plan and execute a “win-win-win” scenario.

Ron Crabtree, CIRM, CSCP, MLSSBB, is a director-at-large for the APICS Greater Detroit chapter and president of MetaOps, a training and consulting firm specializing in lean six sigma in operations, marketing, and sales. He may be contacted at rcrabtree@metaops.com or (248) 568-6484.

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