The Fourth Dimension: Part 2

Building the Links in the 4th Dimension:
It's All About Relationships

Abstract

Abstract needed here…

Article

No doubt, making and selling things is at the core of what a supply chain is all about. And in the last few years, that has been altered by technology—first by making it better, faster and cheaper, then by making it truly different, through the use of the internet and mobility, and soon to be 4th dimensional capabilities.

When contemplating working with partnerships, it becomes obvious that at the heart of successful supply chain management the links in the relationship have to work. I was staring at the various supply chain models (figure 1) and it became obvious that in most of the components, forging a successful relationship is the ultimate issue to address.

Figure 1

Last time we talked about technologies beyond the transactions. The transactions—we all want them—signed POs, the caching of the cash register, are an outcome of a rich set of processes, capabilities, technologies and, yes, relationships.

Many challenges, though, are prominent in this issue:

  • time
  • location
  • verification
  • performance and evaluation
  • and trust.

Getting partnerships established and making them work is a great challenge of business—it can make or break it. We have looked at this issue before from a process perspective, but here in the 4th dimension we are looking at relationships in a digital context.

Online relationships are big business both in the consumer world as well as the enterprise world. We are in the market place of stuff, ideas and forging new relationships at astounding speed.

However, there is that certain inkling fear; anyone who has created a contract with a new contract manufacturer actually shares that same fear. Who are these people? Will they come through for me?

Foundational Views

No doubt, established players have crossed the divide of doubt, the Amazons of the world. But now we are moving beyond this traditional commerce world and researching and creating relationships in purely digital formats. Imagine flying across the world on someone’s ‘say so’. I will pay you when you get here. Or placing an order or contract to build and ship something for you without ever meeting the organization except in digital space. It happens every day, in spite of digital paranoia.

Relationships on line – Elemental forms

Craig’s List—The Mind represented online

Recently I read an article about getting things done. And I apologize to the author and the ‘system’ he uses, since
I cannot remember the name of either, and therefore cannot attribute. The midnight flight haze not withstanding,
I gleaned an important message from this—that your mind does not separate work from life—in other words,
the blending of things, images, events, and ‘to do’s’, all find a place. The digital world really mirrors this reality. Blended in with ‘man finding woman’ is organizations having serious job placements ‘woman finding job’ and also listings of organizations from health, labor, law, media, government, industry etc. All in the grand collage!

Here you can find your soul mate, as well as find a new customer…and your lost cat!

The underline is mine—take these digital sproutings seriously at your own peril. GM’s and Ford’s recent downsizings were in the making for over 30 years.

Get a Reference!

Look at the growth of LinkedIn. It not just outlook [1], it’s about your reputation and the value of that reputation to others. That is starting to get into a real value based conversation. How do you begin to create a network like humans do?

“I like her—you can rely on her for her super powers of…..
Or can you introduce me to that VP of Marketing to talk to….”

This is accomplished by allowing people in to your network, an online phenomena based on reputations and real connections of established trust and value. I have heard much yawning about linking in…but the concept came home to me when a friend of mine was told that she would not be considered for a job interview without endorsements on LinkedIn. And link online to organizations with rich multimillion data bases of relevant business information; the business opportunities are real and endless.

Note the word trust! Being a more serious type, I like that business focus vs. Craig’s list collage…but I can’t just bet on one source of links…there are lots of links with different focuses.

eBay also deals with the trust issue through the posting of recommendations and comments from your customers…

Business Constructs – Policies, Process, Performance and enablers!

Policy is usually an outcome of hard won experiences—losses and common sense, which frequently become the bed rock of a company—and sometimes constrains creativity, as well. In a case study this month, you will see examples of lessons from Johnson & Johnson. Rules in relationships can be exposed on line:

  • no pets
  • blondes under 30
  • US Manufacturing content
  • 3 day delivery required

Performance

VPM (Vendor Performance Management) has been around a long long time. But obviously we do need to look at quality, timeliness, etc., and measure the partnership. Again, we are talking about digital relationships, here. So, a great approach, of course, is to make those score cards actually available to your partners—not done as much as you think—and on line. (Some great firms like Nodstrums do this…sounds like they are as good to their suppliers as they are to their customers—real Relationship Masters!!!) Let your partners see what you see in the relationship, monitor and make amends, or reconcile differences as quickly as possible.

I recently heard that Home Depot limits the number of returns by customers….vs. say, Talbot’s who has an unconditional guarantee. Both are keeping data on returns of their customer, but obviously, for very different purposes. I was told that this is to prevent excessive buying and returning by Home Depot customers. Hmmmm…I find it hard to believe that Home Depot shoppers are any more capricious than shopper of Talbot’s.

But one thing is clear, that the sharing of data is on the rise. Business people want to share (figure 2). Bridging the gap, creating strong relationships and synchronizing business processes is the goal.

Collaboration

……………………… Figure 2 (click image to view larger)

Enablers…

Like people, each relationship is unique, requiring privacy and needs to evolve. As we learn more about people, sometimes we are shocked by the outcomes. Technology today has some very good attributes, but it just isn’t subtle enough. Nuance is missing, and needs significant investment if we are to delight and therefore maintain our customers.

Here is my Amazon search. I was looking for a 4th Century text from India. Amazon, like some of my relatives, thinks it knows me. Ann wants business books. I find this annoying, personally, and it diminishes the relationship. Opting in registrations, inference and learning engines, etc. are attempted by organizations to segregate and make sure they only address your preferences. But good relationships are two-way. Otherwise, as consumers, we should not be on the web; we are integrating with others and we have our part to play, as well.

……………………………………………………….Figure3 (click image to view larger)

Supply chain players have huge lists of issues they need to resolve from preferences and performance to corporate values, which require nuance. Learning about this in the 4th dimension requires that our systems put value on culture, for example, and find a way to assess it.

Relationships – Do We Hang or Get Married?

Obviously, there is a huge difference between being an occasional buyer or seller versus long term highly integrated relationships. The data around these things focuses on the fact that the higher the transaction value or customer life time value, the more important the relationship is.

But again, this article is about Digital relationship, not about the issues around Loyalty.

So here is a simple model to think about. Supply Chain writings—ours and many other people’s—have talked in great volumes about partnership management etc.—and we will talk more about it as well, as in our next webinar.

……………………………………………………………………………….. ..Figure 4

Digital Elements need to be added to the Power lunch, and it won’t happen easily. We have shown a few examples. Those of you who do not use parental controls know about relationship building technologies. The issue will be in how we continue to embed our business rules, preferences and values into the technology—and we will—since being digital in relationship building will continue to grow, and at an accelerated pace…and we don’t want to wind up with a broken heart!


[1] Or online outlook aka Plaxo

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