14 SCS:ROUND TABLE DEBATE SEPTEMBER 2008 SUPPLY CHAIN STANDARD
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“Also”, he continued, “most supply chains have
heroes and villains. There are suppliers to whom
you say ‘thank you for the service, how did you do
it?’; there may be others who didn’t actually know
they were bad performers – which may be because
they don’t want to be on board, or perhaps
because no one has told them. And there are
apparently poor suppliers where it turns out your
own ordering was wrong.”
Culturally, Geldard noted, “Eastern Europe, for
example, doesn’t have the same cultural baggage
and legacy assets – emerging markets generally
have much more willingness to adopt the latest
and most simple ways and leapfrog our rather
static procedures”.
Technology
Given the above, the chairman asked, what is the
proper role of technology in partnering and
collaboration? Ryan said: “Technology has its place –
in the right industry, and where the right
communications and relationships exist: so that
might suggest particularly the retail trade where the
mutual dependencies are greatest. But equally,
collaboration may not depend on technology at all.
I’ve worked on a National Grid collaboration with
contractors such as Balfour Beattie – there was a
standard model throughout the country for making
this work, but it wasn’t about technologies, it was
about working through people.
“Technology can be a big issue – technologies
that don’t work together and then people beat each
other up over it. Technology is a good enabler if it is
flexible, easy to use, and it is prepared to support
everyone that wants to join in,” - to which Peplinski
added that the cost barrier to entry has to be
reasonable vis-à-vis the level of trade.
Which led naturally to the concept of ‘software as a
service’. Bowes admitted that Wesupply “loves to work
with big companies”, but also that, “small companies
The transactional has to come
first. After that, we can
do something with
the information
that forms the
basis for true
collaboration.
The biggest
killer of SMEs is
the big guys not
allowing them to
trade because
theycan’tdoit
EDI. But small
businesses grow into
big businesses and we
have to allow that to happen.
can behave like multi-million organisations: suddenly
they are compliant with what their big customers
want. An out-sourced service lets you say ‘I’m a
sandwich expert, not an electronic trading expert’ but
still be in there.
“The internet is unlocking a lot of stifled demand,
from traders who have good personal relationships
but have felt that the capital requirement is just too
expensive for them to build on that. But the
relationship does have to come first – easier access to
information then helps reinforce it.”Ryan agreed that it
was a question of allowing, “the guys on EDI and the
guys on a web portal to share information; you can
look like a big plc even if you are working from home!”
Hanson suggested that the technology also
helps in other ways – making it possible to have
real, even partnering relationships with second and
third tier suppliers (or customers) with whom you
don’t have any straight transactional relationship. “It
can be a great way of building these relationships,
without undermining your relationship with your
first tier suppliers.”
But in all this, where is the return on investment?
Williams asked. “Small firms are battered by cash flow,
because people don’t pay their bills. Having
everything electronic is fine, but then you find big
companies not paying their bills on time because
someone has done something manually. That itself is
a good reason for smaller firms to want to collaborate
at the transactional level”.
Transactional
Ryan warned: “The transactional has to come first.
After that, we can do something with the information
that forms the basis for true collaboration. The
biggest killer of SMEs is the big guys not allowing
them to trade because they can’t do EDI. But small
businesses grow into big businesses and we have to
allow that to happen.” Peplinski agreed: “As small
companies grow, they have to have partners and
systems that can help them scale both in their
volumes and in their range of business processes.”
So the conclusions? First, it is undoubtedly true
that partnering/collaboration is good, but there has
to be some measurable business case that works for
both parties (so it’s not like some elements of the
eco-agenda – which can be equally touchy-feely, but
address externalities and really do require everyone
to play the same game).
Second, the relationship has to come first, needs
to be business rather than personal, and embedded
in both organisations’ cultures.
And third, the technology, especially ‘on-demand’,
is increasingly accessible. Trading partners of all
technical capabilities can now successfully participate
in collaborative processes via a simple connection to
an On-Demand service, but good technology is not a
solution to a bad relationship. Get the relationship
right and the results can be spectacular.
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