Pink Goop and True Supplier Relationship Management

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Imagine this scenario:  There is a YouTube video of one of your signature products being made in the most heinous way with the most hideous raw materials that has suddenly gone viral and your overall sales are taking a big hit.  Your marketing and sales department has already committed hara-kiri, your CEO is beside herself.  Wall Street is about take a hefty bite out of your stock price.  What would you do?  Fear not – here’s a superhero to the rescue.  If you were Supply Chain Superwoman Nicoletta, you would do this:

Bravo!!  McDonald’s was taking a major PR hit in the market with that pink goop story and this video from McD’s Canada hit the goop out of the playing field!  This pink goop video had the potential of killing one of the most attractive products in McDonald’s chicken platform (we actually worked with that team when they initially launched) – Chicken McNuggets (the savior of many, many family meals as the perfect mealtime bribe!).  And here comes Nicoletta to the rescue.  I can just imagine the relief across the entire McDonald’s system.  And the applause for Nicoletta and the Supply Chain function This video was made in McDonald’s Canada and we’ve been finding out that they are quite the innovators (hats off John B.):

We have long been advocates of:

  • True Supplier Relationship Management
  • Supply Chain organizations needing to focus on the real Value Drivers and not just price
  • The real value is in the relationship and not the contract
  • Suppliers play a major role in adding risk BUT can also play an even bigger role in mitigating risk
  • Suppliers remain the least utilized asset that can add tremendous value

And this is a perfect illustration of that.  Overall Risk Management programs often don’t engage and involve suppliers or the Supply Chain groups which is a huge mistake?  Supply Chain organizations can and MUST look beyond just lowest price and assurance of supply as their measures of success?  Relationship Management is a critical and strategic competency in every supply chain group?  We must identify the real Value Drivers of our stakeholders and stake our success on their measures (market share) and not ours (price, schedule etc.)?

There is a significant opportunity for every supply chain organization to start thinking beyond our traditional metrics and start adopting the metrics of our stakeholders.  If they are holding a stake (an amount of money risked in a bet or game; personal or emotional interest, concern, or involvement), then we must deliver (in this case – protect the market share)? 

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Dalip Raheja
Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.
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