Supplier Relationship Management – a candid discussion! (at the Supply and Value Chain Center-Loyola University)

I was invited (thanks to John Caltagirone – Director of the SVC) to the 2^nd Annual Chicago Supply Chain Summit at Loyola University’s Quinlan School of Business which was sponsored by their Supply and Value Chain Center (“SVC”).  Unfortunately I was only able to attend part of the day but I did get to join a discussion on Supplier Relationship Management – a subject I’m quite passionate about.

First, a little bit about the SVC – a model that I wish many other schools would adopt- as this will start addressing the big gap between what schools produce and what businesses need.  This is a topic that many of you have probably heard me speak on at various conferences (including an entire day at the Next Practices Xchange).  “The center provides the common platform where industry leaders and academics can exchange ideas and advance knowledge in Global Supply Chain Management” and I did get to see that in action.

The themes from the session were all centered on redefining the nature of supplier relationships.  While I wish I’d had the time to challenge some of the discussion, there were many points raised that are fairly critical.  Using two examples on the panel of successes was quite interesting (Cardinal Health – Baxter; Martin-Brower & McCain Foods – McDonald’s) and their different perspectives offered different learnings.  It was quite obvious that Brian Hancock (Martin-Brower) had a fairly unique perspective which is driven by their relationship with McDonald’s – a client of ours and an organization that we are quite familiar with.  The definition of a supplier relationship with McDonald’s is quite unique and they do apply system -wide thinking to their system.  McDonald’s Plan to Win is a plan for the entire system which not only includes their suppliers but also their suppliers’ suppliers. In many cases, it requires competitors to collaborate (e.g. Martin-Brower with HAVI).

There was also a spirited discussion on another of my favorite topics – Competencies.  The anxiety in the room was fairly obvious – there is a growing level of tension in the corporate world driven by the stark recognition that the nature of supply chains is changing and changing rapidly and  the competencies required are sorely lacking in their organizations and academic institutions have not yet started delivering those competencies.   The historically derided “soft skills” were immediately acknowledged by the panel to be  much more strategic and critical – this should sound very familiar to our readers.  For example, lack of Collaboration competencies were immediately recognized as a critical risk.  The days of adversarial relationships with suppliers are long gone was the conclusion and organizations that don’t have the required competencies to deal with that new reality is a major risk.

There was also a very interesting discussion that was started, but time got in the way, and that had to do with how can suppliers compete-especially small suppliers trying to establish a foothold.  What was fascinating was that not once did price come up as the way in.  Every single suggestion was focused on identifying the real value drivers of the customer and then delivering to those value drivers – not a single suggestion had to do with price.  This is very similar to the discussion I had with the Board of FSMA at their recent annual conference where their membership is trying to decipher how to deal with being at the receiving end of Category Management.  They were also quite surprised when I told them to stop trying to compete on price as that is a losing proposition.

I am very intrigued by the Supply and Value Chain Center at Loyola University as I think it can play quite a valuable role in bridging some very critical gaps.  We are always looking for people and organizations that are playing leadership roles in our community.

Here were the panelists at the session:

Rick Ciccone – Chief Supply Chain Officer, McCain Foods

Rob Doone – VP, Integrated Logistics Services, Cardinal Health

Mike Duffy – Executive VP, Global Manufacturing and Supply Chain, Cardinal Health

Tony Fitzpatrick – VP, Supply Chain and Process Re-Engineering, Baxter

Brian Hancock – President of North America, Martin-Brower LLC