About a month ago, John Trentacosta wrote about a subject that no one wants to talk about (mhmonline.com). Fact is, an otherwise phenomenal supply chain can be brought to its knees when one partner in the chain runs into financial trouble. A business relationship with a pauper is not sustainable.
Some early warning signals - the canaries in the coal mine - include: requests for price increases, early payments, accelerated terms, or even financing support; late deliveries or quality degradation; failures to appropriately invest in IT and/or other assets; maintaining spend during downturns; delinquent taxes, deteriorating receivables, and extended payables; and bad press, among others.
Due duiligence on the front end can help prevent problems on the back end, but sometimes bad things happen to good people. That's when an early response team reaction to early warnings can pay off. Sometimes, you've got to pull the plug. But, often you can mutually develop work-out plans to let the troubled partner survive long enough to prosper -and to keep your supply chain humming in an unrelentingly competitive marketplace.
Yesterday morning I caught the tail end of a story on NPR about a small social media company in Seattle, Social Strata, that offers unlimited time off for their employees. It began with one dedicated employee caring for her husband after an accident, and was ultimately extended to all ten employees in the company.
There are so many interesting business topics at play in this story. The two I am going to explore are trust and judgment.
In order for unlimited time off to be successful, employers must trust that employees are using the time off productively and appropriately.
If you trust that those you've hired to help grow your business, then you should trust that your employees are using the unlimited vacation time to actually take a vacation because they want to travel somewhere new, to take a long weekend to visit family far away, or use extended time off to care for a spouse or sick child.
You should also trust that they will return to work with renewed focus and gratitude for the opportunity to spend time away without consequences at work.
Next is judgment. Do your employees have good judgment? If they do, they are probably using their time away from the office because they would have a hard time focusing and being productive at work in the first place!
If employees use good judgment in work related tasks, their good judgment probably extends to other areas in their lives. Making it easier for employees to practice good judgment makes for more satisfied employees. For those who take pride in their individual and team success at work, this means employees will find a way to take their sick child to the doctor and also finish their deliverable, as promised, on time.
Social Strata and Netflix, two companies with unlimited time off, made sure to note that employees must finish projects and duties on time. This is an expectation employees must manage responsibly.
NPR reports that companies with unlimited vacation time are more productive and more engaged with unlimited time off. One piece I found to be interesting is that employees began taking actual sick days off instead of coming in to work to spread their germs to co-workers! Imagine that!
For those of you with decision-making power, would you let your company go to an unlimited vacation policy?
For those of you without decision-making power, how do the constraints of limited time off affect your use of vacation days?
Source: NPR.org, August 12, 2010
A good friend of many years was recently bemoaning what he sees as the continuing decline of manufacturing in the US. His biggest complaint was that, every time a plant closes, its engineers hit the streets newly badged as "lean" consultants.
"Lean" indeed - a larger population trying to capture bigger pieces of a shrinking pie.
I don't have the data to challenge his contentions. Clearly, a lot of manufacturiung has left our shores over the past couple of decades. But, we still manufacture many things, although perhaps not on the scale of what General Motors plants used to look like. Certainly not at the employment and production levels of twenty years ago. That said, we're still in the early stages of in-shoring and right-shoring movements, and productivity - if not production - continues to climb throughout the sector.
It's possible that my morose amigo has seen his consulting and training business shrink because, at least in part, of other factors. More and better-educated and better-trained engineers and operators. Radical shifts in learning and knowledge transfer paradigms. Tired branding and terminology.
And maybe - just maybe - more companies are learning from one another in close relationships, and have focused, targeted, and empathetic partners to help them improve performance. Or perhaps they are getting help from subject matter experts with different styles, with different kinds of client relationships, and with different approaches to salvation that go beyond traditional projects and programs.
Seems to me that part of staying in the game - and ahead of the pack - in the 21st century is continual reinvention . . . within a supply chain, within a company, within a product, and within oneself. I'm just sayin' . . .
I'm grappling with a concept again, which is no surprise - nothing comes easy to someone with my limited candlepower. Malcolm Gladwell devotes considerable space in Outliers to the premise that exceptional intelligence might be of little incremental value in the real world, that being "smart enough" is good enough to provide a foundation for success.
I've been trying to apply the principle to the world of supply chain management and how the players in a given supply chain relate to one another. Apologies if I'm twisting the author's meaning and intent a bit. I do agree that a level of intelligence that makes people - and organizations - capable of operating only in some bizarre parallel universe doesn't help make things go well in everyday life.
But, if I were constructing a supply chain designed for success, I'm inclined to think that I'd pick participants who were somewhat better than smart enough. It's like choosing up sides for a schoolyard game - you want players who are better than good enough, but you might avoid the superstar divas (unless you, yourself, are the diva).
Then, I'd be looking for supply chain partners who were also creative and innovative. Not simply creative enough, but better than creative enough, without being completely undisciplined and wildly impractical, or even irrelevant.
The importance of - and difference between honest enough and better than honest enough is a discussion for another day, but you get the idea.
Am I wrong? Aren't we all striving to create solutions, organizations, and business relationships that are noticably better than good enough, without losing traction in a fruitless quest for the diminishing returns of absolute perfection?
Note: Achieving perfect order performance is not a fruitlesss quest; it is a byproduct of being noticably better than good enough.
I agree it was a good move to join forces with each other to market their product. With increased sales they can raise money to support outside research that will help support their claims of heath benefits.
Social networks are not just a tool for people to reconnect anymore. With the growing number of people becoming involved with these networks, restaurants feel it is important to start utilizing them for advertising. McDonald’s Vice President of communication, Bill Whitman, believes that using these networks will help improve their marketing campaign while also improving long term branding. In fact, McDonald’s is serious enough about the virtual world of advertising that they have hired Rick Wion, who is the Director of Social Media. His main duties are to implement digital-communications. Starbucks has taken it to yet another level. Twitter recently released its new marketing tactics to companies. It is now selling spots for a company’s Twitter posts to come up first for a price. Starbucks has bought into this campaign and has now bought spots so if another person is searching for coffee or even mentions going to Starbucks in their “tweet” then Starbucks tweets will pull up at the top of their page. This will increase web traffic to their site and increase their brand. It seems that with the increase in people utilizing these social networks it becomes a growing opportunity for businesses to use these as an opportunity to reach a larger magnitude of people.
Over the next year, Kraft foods is planning on acquiring Cadbury. The change will happen and is projected to increase the name brand of Cadbury and is meant to raise Kraft stocks over the next few years. The acquisition has many investors worried, because the amount of money being spent on the acquisition is projected to take a few years before investors see any type of payoff. Kraft foods also recently sold their frozen pizza branch to have the funds to acquire Cadbury, which was a major deal.
This acquisition is so significant, due to nature of the two companies. kraft is one of the top food producers in the entire world, and Cadbury is a major name, especially in Western Europe. Kraft has plans to improve organic production by 5% in the long term, and will own about 15% of the worlds confectionary market. Kraft shows promise in improving name brand quality and has great strategy to promote strong name brands, with the help from Cadbury, over the next few years.
http://www.forbes.com/2010/02/16/kraft-earnings-profit-markets-equities-cadbury-update.html
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General Mills recently released its Corporate Social Responsibility Report.(CRS). The CRS is an annual report that lists the company’s goals for the year in several areas. This year it focuses on health, community, and environment. General Mills has improvements of nearly 50 percent in the nutritional profile since 2005. The company has added whole grains, vitamins, fiber, and calcium to several of its products and it has also reduced fat, sodium, and sugar. The report stated that the company plans to accelerate sodium reduction this year by reducing around 20 percent of the sodium in 600 SKUs by 2015. General Mills has also given $91 million to philanthropic needs which is up 4.3 percent since last year. The company is also actively seeking new and innovative ways to reduce waste and make a smaller carbon footprint. General Mills is putting forth an effort to become healthier, cleaner, and more giving. This report can help consumers identify the many programs General Mills is involved in.
Article:
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The biggest conflict currently escalating amongst the seed industry is between farmers and the big corporate giant, Monsanto. Over the past decade, these two entities have been fighting over legal issues concerning Monsanto’s patented genetically modified crops. Since farmers reuse their crop as seed for the next planting season, Monsanto has been suing hundreds of them each year for patent infringement. Most farmers give in, and settle out of court, because of the high legal fees. Monsanto knows these farmers will continue to purchase their seed, because of its high quality and yield producing traits. Is it fair for Monsanto, who makes billions of dollars in profits each year, to form lawsuits against famers, who may make less than $50,000 each year? How can a consulting company help mitigate the problem between Monsanto and the farmers, and ultimately resolve this issue? It will be interesting to see how this problem pans out in the future between David and Goliath. What are your thoughts on this issue?
http://www.keepmainefree.org/suesuesue.html
Wal-Mart has been one of the most successful international businesses in the world. In the process of expanding to India, it is important for Wal-Mart to develop a good relationship with farmers, as farmers are a vital aspect to India’s food industry. Wal-Mart is trying to create a secure initial agricultural position that can be used for further improvement in India. In order to improve efficiency and increase the flow of goods, the company uses hyper efficient practices in their distribution model. For the past few years, Wal-Mart has been developing a close and trustworthy relationship with the farmers in India. In Haider Nagar, farmers prefer to do business with Wal-Mart because the farmers get paid well and on time. Wal-Mart distributes its products quickly to consumers, which increases farmers’ profit since they sell their product at a faster rate. Overall, the business to business relationship a company has with its partners is important because it will help the company succeed in foreign markets.
I found a brief article describing business to business relationships in the agriculture/food industry. Effective communication through businesses can help reduce environmental uncertainty, improve access to crucial resources, and increase business productivity and effectiveness. Agribusiness relationships are disected into four different types: Spot markets, Repeated market transactions, Formal contracts, and Financial participation. Then, the elements of a good agri-food supply chain relationship are discussed. All information is detailed with two specific examples. The first business to business relationship example deals with the cattle-to-beef process, while the second example details the barley-to-beer/whiskey process. Both examples are perfect for describing great relationships where extreme trust is necessary, especially with quality and safety. Finally, research identifies several success factors for sustainable supply chain relationships and communication. Visit the website at
http://www.sac.ac.uk/mainrep/pdfs/relationshipsinagrifood.pdf
Jason Koss
April 14, 2010
ACE 430
Arby’s has made a joint venture with McLane as its distribution channel. This will help Arby’s to expand its market shares in Texas and surrounding states by using McLane’s great distributing system.
I think it is a good idea for Arby’s to be partnered with McLane due to the benefits they will receive. Being a partner with McLane, McLane will provide many services to Arby’s such as logistics, procurement and inventory management solutions. In addition, a vice president of supply chain at Arby’s Restaurant Group said that McLane’s efficiencies have supported their growth as a world-class supply chain organization. On the other hand, McLane is also happy being a distributor of Arby’s because Arby’s is a great and successful restaurant.
I think this is significant because both of the companies are benefited a lot from this joint venture. I think overall it will increase both companies’ profitability and will build a strong relationship between them. Plus, as Arby’s expansion increases, it will create many jobs for people.
I think it is not easy to pick a good business partner like Arby’s and McLane. There are various criteria to be considered in order to make such decision. For example, they need to consider whether they are sharing the same objective and code of ethics. This will prevent unnecessary disagreements which can disrupt sales. They also need to think about the image and the reputation of the companies and whether they received positive customer feedback.
What do you all think about this article? Please comment on it!!!
http://www.food-business-review.com/news/arbys_beefs_up_relationship_with_mclane_for_texas_market_091117
http://www.agriculture.com/ag/story.jhtml;jsessionid=4P5WLONHB2INICQCEARCAOQ?storyid=/templatedata/ag/story/data/1268935293022.xml#continue
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The article “DuPont expanding Pioneer research facilities” caught my attention because I feel that what Pioneer is doing is going to be good for the economy. DuPont has decided to expand their research facility and will help farmers increase productivity. Increasing productivity will help lower the prices of the products and help the consumers. The goal of this expansion is to double the farm productivity by 2050. By building this facility, the name Pioneer is going to become even better known. A great thing about this expansion is that it is going to better the agricultural products. The expansion will also help the economy because it is going to open up 400 jobs in the central Iowa area. In the economy today, increasing the farming productivity and increasing jobs is very important. This whole project is going to help turn the economy of Iowa around resulting from the increase in jobs and products that are going to be produced.
---You must copy and paste the link into the url---
This article really caught my eye because it is directly related to the cattle market in the southern Illinois area and was published by U of I. The article discusses how if cattle ranchers can verify where and when cattle are born, they can charge a premium price. The program is called the Processed Verified Program and is one of the first steps in several for ranchers to add value to their cattle. This would be huge as I learned in class that the livestock producers add very little value to the end product that is produced. I think that if cattle producers can do this, it would be huge for the industry. People are very concerned with where their food comes from and this program is just one more way to do that. With all the debate about the treatment of animals I believe that this will help the consumer feel more connected to the farmer and maybe not be so quick to jump the gun about livestock management.
http://ethoswater.com/index.cfm?objectid=3AD74272-F1F6-6035-B068E1C48A77AE99
Few of us actually remember Ted Lewis' signature line, but the question has even more relevance today than when the pride of Circleville, Ohio sported a top hat and a clarinet while soft-shoeing his way across America's vaudeville stages to the gentle strains of Me and My Shadow. Oregon State University's associate professor Zhaohui Wu has recently published a research paper in The Journal of Business Research that suggests: 1) supply managers should be wearing several hats in the course of their work; and, 2) the ability to do so ought to make supply chain partners happy.
The opposite turns out to be true, according to the study. When the supply manager successfully executes roles as a buyer's negotiator, a buyer/supplier facilitator, a supplier's advocate, and an educator for internal customers, he or she is seen as a many-faced phoney. The outcome? No-to-low trust, doubt of good intentions, and eroding relationships.
Professor Wu indicates that the situation is even more difficult in a tough economy, and that being the middleman in a supply chain relationship is more complicated than ever. It shouldn't take Sherlock Holmes to figure those out. But, he goes on to indicate that the answer lies in more research. Catch these: "Maybe some . . . supply managers are just naturally good . . ." ". . . perhaps there are tools that can help . . ."
Even Doctor Watson knows that the answer isn't hidden in more research. The research has been done, and the results have been well-documented. There are demonstrably successful tools and techniques in how to build strong business relationships, as well as decades of existing case work that demonstrate the importance of interpersonal skills - genuine people skills - that relationship leaders and practitioners use routinely, and with powerful measurable impact on the strength of relationships and supply chain performance.
A related article may be found at www.logisticstoday.com/operations_strategy/make0everyone-happy-supply-chain-0322.
The idea of having access to a shared master schedule that all employees to view and edit seems like a great idea.
With a shared master schedule it is easy to identify when someone is on a business trip or took an afternoon off, and it can help tremendously with communication in general. Many offices have some form of master schedule in place already. In many cases this schedule has gone digital.
This is one of those wonderful ideas in theory-- and in practice, so long as it is not abused. I heard about a large company that uses a scheduling program that allows high-level employees to book meetings with their employees as long as the time slot is available. This seems fair, and like a smart system.
Some executives are trying to enforce a software change that would allow them to reschedule or cancel their employees' meetings so they can schedule meetings in the once-occupied time slots. It is my personal opinion that canceling someone else's meeting is crossing the line into abuse of the system, but I understand others-- like busy executives-- might think otherwise.
What do you think?
Customer Needs Assessments require active listening and quick critical thinking. Customer needs assessments serve as tools to help clients problem solve. They work well to address and resolve customer vision and priorities, create and capitalize on business opportunities, end dissatisfaction with underperforming suppliers, recover deteriorating relationships, strengthen existing relationships, grow and thrive in developing industries, develop greater understanding of a competitor, and improve overall performance.
This makes customer needs assessments seem straight forward, and in many cases, they are not. The best and most successful consultants will listen to what the client says about the customer needs assessment and be able to sift through the words to pull out the real issue, which may be hidden.
This boils down to one of my favorite principles of business management and relationship management: listening. It is a very real, very critical and powerful skill.
Ron Maciejowski is the Vice President of Sales for Worthington Industries. He sits on the board of all Worthington Industrial Joint Ventures and Recreation Unlimited.
Kathy Hoyt, a senior consultant with S4 Consulting, sat down with Ron recently. The interview is transcribed below.
_______________________________________________________
Kathy Hoyt: How has your approach to handling business relationships evolved throughout your professional career?
Ron Maciejowski: In the early days (1970's) there was more of the attitude that there was enough in a sale for everyone to be profitable. The pie was always growing and all parties could profit (our company, our supplier, our customer).
Today , many people think the pie is a set size which means you have to take the profitability out of someone else's pocket. To some extent that is true if we don't get back to growing our economy in the right way and making the pie bigger. This has put much stress on the customer/supplier relationship.
Kathy: Who helped you develop business relationship skills and how?
Ron: Mentors, the guys who brought me into the business. They showed me here's how we do it. You have to build the relationship to get close to the customer. You do that by:
Kathy: How has your attitude and/or skills contributed to personal or company's success?
Ron: I learned by example. If I made a mistake, I wasn't called on it openly in public. I learned to do the same things with my people. People are much more productive if not publicly reprimanded.
I also learned to listen to "the other side" of what was being said - try to understand both sides before jumping in.
Kathy: Can you recall a time when someone handled a relationship in such a way that it saved the sale?
Ron: Yes, there's been times when we walked out better than when we walked in. When there was a problem with a customer and it was our fault we would go in, accept responsibility, offer no excuses and get the problem fixed as soon as possible.
Other opportunities can evolve if you just admit it and fix it because if you can't fix it in a timely manner it will kill the relationship. As part of supply chain, we don't have total control over a situation but the main thing is don't make excuses - just fix it.
Kathy: Can you recall a time when the absence of a relationship has lost a sale or a customer?
Ron: We had a customer recently who didn't feel we thought he was important. A quote got to this customer which was completely inaccurate - way too high.
He assumed we didn't care about his business and we were just sending a quote to get it off our desk. We had been doing about 40% to 100% of his business and he pulled it all because we didn't appear to care enough about him. It certainly was not the case (many internal discussions about what went wrong) because it in fact was very important business to us.
We are working very hard to recapture our customers trust and confidence.
Kathy: What does Worthington Industries do make relationship management a core competency?
Ron: Everyone does it differently but our philosophy of treat the customer they way you want to be treated has always applied.
The philosophy is presented during orientation and reinforced. If someone doesn't buy into the philosophy, they usually don't last very long around here.
Kathy: How do you measure to see if business relationship management is working?
Ron: Amount of business from that customer, they tell us about opportunities for new business and if they come to us for solutions to help their business we know our relationship is solid.
Kathy: What advice do you have to give to people who want to develop skills in business relationship?
Ron: Listen to what the customer is saying. Everyone wants something from you. You just have to learn what the gap is (the difference between what they have and what they want) and then figure out what I can do to fill the gap.
Kathy: What one piece of advice would you give the people who are managing customer relationships?
Ron: Put yourself in the customer's shoes and treat him the way you would want to be treated.
Give the customer timely information, correct information and do what you say you are going to do.
Kathy: How do you think the economy has affected business relationships?
Ron: Everyone is fearful right now about their companies staying in business and their keeping a job.
People are more stressed and just want more time at home. The relationships today are on a more professional level than in the past. However, it is a mistake to assume that people don't buy on personal relationships.
That gets back to building trust, gaining confidence by doing what you say you will do and making the customer look good by providing excellent service and providing a high level of perceived value.
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Thanks, Ron!
Business Relationships Members, do you have any other questions for Ron or Kathy?
Ron Maciejowski began his career with Worthington Steel in 1972 and held various sales posiions until going into management in 1981. He has served as Vice President of Sales at Worthington Industries since 2008.
This image turns the metaphor on its head, and the people involved probably aren't really rats, but in tough economic times there is a tendency to avoid risk and stay with less-than-satisfying jobs. When the inevitable rebound arrives, the exodus of talent can blow the doors off companies that have been complacent about retaining "A" performers.
The February issue of CFO magazine (www.cfo.com) nails the issue in its All The Right Moves article, recommending proactive measures during what are usually hunker-down times to help make sure that the arriving recovery does not "inspire a raft of departures."
The challenge and consequences go, I think, deeper than simply hanging on to desirable human assets.
Consider the impacts of sudden and unexpected key employee departures on business-as-usual business relationships. They can range from unsettling to devastating. Who do you turn to when your major customer's go-to person has gone-to somewhere else? Who makes good on supplier problems when your "inside" contact is now on the outside? More than your timbers are likely to be shiverin', matey, when you wake up to that kind of news.
The argument for building business relationships that transcend personal contacts (and schmoozing as a substitute for communication and collaboration) gets to be compelling when the downside of people moving on is fully explored.
What's your take on this, as we see, like crocuses in the spring, early signs of economic recovery?