The (Hidden) Elephant in the Room: Trust (VII)

Posted by Bryce Boothby on Aug 6, 2019 8:34:38 AM

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Digital transformations are hard work and require more than just technology to be successful. In the countless times I’ve managed multi-party setups, the greatest obstacle was consistently the most intangible one: Trust. Companies today are networks, so if your partners aren’t on board with your vision, the solution you choose – no matter how robust – will ultimately fail. As you define your priorities, also use this process as an opportunity to consult your network about how your needs align.

Honesty Is the Best Policy

Securing everyone’s buy-in isn’t easy. Many companies find it difficult to share operating data because it might reveal shortcomings to their customers, suppliers, and competitors. Remember that flaws within networks are rarely exclusive, and issues are often joint and aggregate. Even slight inefficiencies compound at each link in the supply chain, especially when you consider the various built-in buffering and safety stocks – tracing back to raw materials, components, manufacturing, finished goods inventories, multiple warehouses and distribution centers – there’s typically “hedging” at each step. Multi-party implementations aiming to provide visibility into end-to-end waste require honest reporting.

Candid information sharing also prevents miscommunications. My team and I once established rigorous internal KPI’s to please a high-profile customer only to discover our goals didn’t align with theirs. We all sat down and did the hard work of discussing the actual issues and inefficiencies until we hashed out a common goal. Doing so was instrumental to ensuring our customer – a public company with big, Wall Street expectations – could deliver a flawless and major new product launch on time.

Demonstrate the Potential Solution’s Advantages

trust-in-business-networkThere will be skeptics, especially if competing suppliers are in the same supply chain deployment. However, a workable solution is usually a boon to everyone involved. Earn your network’s confidence by conveying the expected benefits to each party. For multi-party deployments that are broad and require each participant to invest, I’ve found it worthwhile to conduct an all-hands kick-off meeting to explain the benefits of the effort.

The goal here is similar to the task we discussed earlier of gaining executive sponsorship for the digital transformation. Just as you’ve made the case internally to gain trust and allocate resources to the project, you’re essentially asking the same of your network. Fortunately, these upgrades tend to be valuable to everyone involved and yield many worthwhile benefits.

Articulate the transformation’s advantages, and illustrate how the tool will profit you, them, and their business networks (suppliers, distributors, and customers). When we provided a key customer with end-to-end supply chain visibility and an aggregated demand signal, the improved transparency allowed each party to better collaborate and optimize relationships. The results were many: a reduction in end-end cycle time, removal of redundant and non-value-added activity, reduction in overall process cost, tighter process integration and optimization, improved working relationships, and long-term value creation.

Sometimes partners are hesitant to invest in such a project due to cost. In one case, our largest customer asked my team and I to make a multi-million-dollar investment as a contributing participant, so either we signed on or jeopardized the account. Fortunately, the imperative was strategic to our customer and they offered to invest on our behalf. We were ultimately able to repay the favor through lower costs and faster turnaround times, as the system vastly improved our efficiency.

 

While this step might seem secondary, having your network’s backing is actually paramount to a successful implementation. Companies are no longer single, isolated entities, so if you can’t secure trust and participation from all parties involved, the effort won’t work. At the end of the day, digital transformations are in everyone’s best interest. Demonstrating the benefits is usually sufficient to get everyone onboard and optimistic about the value proposition. Having obtained your network’s backing, it’s time to turn inward and start putting together the business case.

 

Up next: Getting Down to Business: It’s Time to Make the Case for Your Digital Transformation

Missed the previous posts in the series? Start here.

 

Bryce BoothbyBryce Boothby is an MPO board advisor and former executive of Flextronics, Celestica, ModusLink, Regenersis PLC, and Lulu.com. His blog series, “Making the Case for a Digital Transformation,” will investigate the topic of “Achieving the perfect order” and how companies can differentiate between solution providers, calculate returns on investment, choose a vendor, integrate with legacy systems, sponsor and sell the business case, and ‘try before you buy.’

 

Topics: Supply Chain Transformation, Multi-Enterprise Business Networks, Digital Transformation

 

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