A few years ago, I had just joined a renowned international high-tech company as Supply Chain Director. I’d come from an automotive supplier, where I’d developed habits of customer/supplier relations that were, shall we say, frank and direct, and sometimes a little rough. When things weren’t going well, we said so, and demanded action.
In this Anglo-Saxon high-tech multinational, we had an internal supplier who manufactured semiconductors for us. We were in the middle of a microcontroller supply crisis with this entity. So I picked up the phone to express our dissatisfaction, explain our minimum requirements, and demand a recovery plan.
The next day, I got a call from my boss, who’d had the boss of my contact at our internal supplier. It was explained to me that we couldn’t behave like that towards our colleagues and friends.
When you ask a multinational company who their worst suppliers are, it’s not unusual for internal suppliers to be mentioned. Customer/supplier relations within the same company present particular difficulties, as they are often the product of internal politics.
When you’re suppliers or internal customers, you share common things: a common history, a common hierarchy, a common corporate culture, no doubt common performance indicators, as well as perhaps IT systems.
This doesn’t mean, however, that relations are transparent, clear and win/win, because the relationship is also imbued with politics: you and the parties you deal with report to common managerial strata. Your respective bosses may be on excellent terms or they may hate each other fiercely. But above all, your objectives are not necessarily aligned. You’re each in a separate silo. We’re part of the same family, but each in his own bedroom.
The good news is that if you’re part of the same family, with a little managerial determination from the family council, it’s possible to make simple decisions to change everything.
Three things are enough to turn the table around:
For years, we’ve been encouraging our multi-site customers to adopt this approach. The majority of our customers have done so with great success, whether for manufacturing or distribution flows.
However, we have also seen some customers give up and go backwards. Several of our customers had set up an inter-site VMI mode, and then reverted to a traditional relationship: the customer site places orders, and the supplier site must manage to deliver them on time.
The main reasons for this? Performance indicators limited to the site, lack of trust, power games (I’m the customer, you’re the supplier, so I’m the boss), managerial turnover.
If you’re in a position to orchestrate internal customer/supplier relations within your company, don’t hesitate: share end-to-end visibility, establish VMI flows, clarify upstream/downstream responsibilities, orchestrate meeting points within S&OP processes to reinforce trust and counteract political games – your end customers, the real customers, will be grateful!