The Trusted Chain

In a recent online article on S&OP at Sony, http://www.supplychainquarterly.com/topics/Strategy/scq201101sony/, Vice president of Supply Chain Operations Yuka Yu uses the term ‘trusted chain’ rather then supply chain. According to Yu, this term emphasizes that the strong relationships between Sony and its partners depends on mutual trust and communication. As many of us will know, implementing CPFR and S&OP like Sony did, requires internal and external trust.

As Stephen Covey points out in his book ‘The speed of trust’; wherever trust goes up, speed goes up and costs go down. Wherever trust goes down, speed goes down and costs go up. Covey gives other strong support to the idea that having a culture of trust in your organization will pay off.  Without trust in your organization, S&OP, IBP, or any cross functional process for that matter, will never be effective.

Now having a high trust organization is one thing, but being able to extend that trust with your partners in the supply chain through CPFR, is another more complex step. It seems Yu is taking her organization there. That’s what I call supply chain vision and leadership.

In a 2009 blog,  https://supplychaintrends.wordpress.com/2010/02/15/the-behavioural-supply-chain/, I advocated the term ‘behavioural supply chain’ to emphasize that we’re almost done optimizing the supply chain if we won’t be able to improve our understanding of the behavioural supply chain. As most of the behavioural supply chain is driven or improved by trust, I might just have to go with Yu’s  terminology ‘the trusted chain’ and start advocating this.

What do you think about the ‘trusted chain’?

5 thoughts on “The Trusted Chain

  1. Niels,

    Another well written and astute blog. Certainly collaboration offers tremendous financial benefits to both companies engaged. The degree of trust is commensurate with the results. Being able to make your Supply Chain faster AND reducing costs at the same time should be enough incentive to cause any company to seriously consider the opportunities.

    In another recent posting by Semiconductor Industry Expert, David Manners (http://www.electronicsweekly.com/blogs/david-manners-semiconductor-blog/2011/04/why-is-the-supply-chain-so-opa.html) he raised a similar question by asking why visibility is so limited. Again, it requires trust. But I would also argue it requires agility, ease of use and the ability to make small incremental steps that deliver immediate success that are measurable.

    To often, “trust” related projects have a scope that is too large. With too many risk factors on the table (i.e. modifying existing systems), companies immediately push back from the table as they understand the resources that effort requires is too great to even consider. But if you look at the transactions, audits, actors and opportunity of any supply chain it becomes apparent that small changes in collaboration can deliver real results without the cost, disruptoin or risk.

    I hope that the barrier to collaboration isn’t actually trust. Our customers and our vendors are all companies we have done work with and hope to continue to do work with…so we should trust them. Similarly, if my vendor wants to keep my business, their motivation should be obvious. Customers may not see it as trust but if you can increase the value you deliver them, their motivation should also follow.

  2. Thanks for your feedback and insight Steve,

    I came accros this blog as well last week. I agree you need agility, timely information availablity etc to improve decision making
    Often through use of technology, this can be improved. I also agree with your point that scope, or scope creep can have impact on many things.

    Still I think these points can be de-coupled from trust.

    In a high trust environment people will give eachother pro-active feedback and improvement opportunities to overcome a situation of low agility and information availability. They are in it together and will in an open and honest way make the best out of limited capability. In your example, the fact that the scope is perceived as wrong, will be addrressed in a constructive way. At least it is on the table and people stay engaged.

    The same situation in a low trust environment? People will use information availability as excuse to hide behind it, lay blame on others. They won’t feel confident to provide pro active ‘trusted’ feedback with improvement opportunities to make the whole better. The fact that the scope is perceived as wrong stays under the table. And behind close doors people will complain about it and demoralize the group. There will be no engagement

    The barriers to collaboration are many, but to me trust and engagement are the big ones

  3. Niels,

    Trust and engagement aren’t barriers to collaboration; they are personal/cultural deficiencies. They may retard collaboration as you’ve said but they aren’t barriers.

    Stupid analogy; if I have a bicycle built for two and I love to ride bikes but my Wife is afraid of them, she won’t ride the bike. That isn’t a barrier to the bike, it is just a problem my Wife has. So what would I do in this situation? Find another person to ride my bike with me AND let my Wife know that I’m actively seeking a bike riding partner. She either gets over her problem or I’m riding with someone else.

    Think of how many times a Customer has told your company “this is the way it is going to be”. You as the vendor get to decide if you like it that way or you can tell them to hit the highway.

    If your partner uses information availability as an excuse to hide behind, eliminate that excuse by providing them the technology that seamlessly, effortlessly and easily allows them to get the information. If they refuse that, let them know you are interviewing bike riding partners immediately.

  4. Yuka Yu is a woman. A little research (and not assuming that every executive is a man) might have prevented you using masculine pronouns.

  5. Thanks for the feedback, I will change my wording. And you’re right, no research has been done, I only read the article
    Funny though Japan being the most masculine country in the world and I’m making this mistake with a Japanese lady!

    My mistake

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