90th Annual International Supply Management Conference and Educational Exhibit May , 2005

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Improving Supplier Relationships in a Weak Top
Management Commitment Environment Kimball
Bullington, Ph.D. Professor of Supply Chain
ManagementMiddle Tennessee State University
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Presentation Outline

• Importance of Top Management Commitment
• Reasons for Weak Commitment
• Building Commitment
• Working with Weak Commitment
• Closing Thoughts

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Why is commitment so important?

• ? ? ?

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Why is commitment so important?

• Supply relationship success factors depend on top
  management commitment
• Supplier development
• Resource commitment
• Buyer-supplier communication
• Trust
• Measures
• Morale / Leadership

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Supplier Development

• How can weak commitment hinder supplier
  development???

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Supplier Development / Resources

• Travel time and money to visit suppliers
• Time spent on supplier development teams
• Capital to invest in fixtures, gauges, and
  equipment

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Supplier Development

• Demings Point Number 4
• How can a supplier be innovative and develop
  economy in his production processes when he can
  only look forward to short-term business with a
  purchaser.

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Buyer-Supplier Communication
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Family Strengths Research

• Strong families
• 20 years of research
• Over 6,000 surveyed

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Six Characteristics of Successful SCRs

• Commitment
• Good communication patterns
• Ability to deal with crises (change)
• Spiritual wellness (principles-centered)
• Spending time together
• Appreciation / feedback

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Trust

• Commitment Focus (Posteriorization)
• Capability
• Capacity

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Morale - Leadership

• Vision constancy of purpose
• Teaching
• Confidence
• Inspiration

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Reasons for Weak CommitmentUnderstanding

• Importance of supply
• Cost and nature of commitment
• Supplier perspective

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Reasons for Weak Commitment Distrust

• Win lose outlook
• Reflects managers view of customer-supplier
  relationships
• Past experience
• Intent vs. action
• Supplier performance

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Reasons for Weak Commitment Tactical vs.
Strategic Perspective

• Historical perspective of purchasing
• Strategic roles taken by other functions
• Current staffing of supply function
• Lack of initiative by supply

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Reasons for Weak Commitment Performance

• Cost
• Quality
• Delivery on-time performance, lead time
• Technology support
• Principles

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Reasons for Weak Commitment Disconnect with
Strategy

• Supply strategy isnt linked with corporate /
  organizational strategy
• Supply uses different vocabulary
• Supply uses different measures

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Reasons for Weak CommitmentWhich ones have you
faced?

• Understanding
• Distrust
• Tactical vs. strategic
• Performance
• Disconnect with strategy

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Building Commitment

• Understanding
• Distrust
• Tactical vs. strategic
• Performance
• Disconnect with strategy

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Building Commitment
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Building Commitment Reconnecting Strategies

• Consistent processes
• Use organization tools where possible (ISO, 6s,
  Baldrige Award, Lean, etc.)

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Building Commitment Reconnecting Strategies

• Consistent processes
• Use organization tools where possible (ISO, 6s,
  Baldrige Award, Lean, etc.)
• Consistent language
• Use organization language, not SCM jargon

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Building Commitment Reconnecting Strategies

• Consistent processes
• Use organization tools where possible (ISO, 6s,
  Baldrige Award, Lean, etc.)
• Consistent language
• Use organization language, not SCM jargon
• Use common measures

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Working with Weak Commitment
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Closing Thoughts
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