Alignment and compatibility with supplier partners

By Robert A. Rudzki, SCMR Contributing Blogger
May 10, 2011 - SCMR Editorial

A recent conversation reminded me of a powerful framework for evaluating the likely success or failure of two companies working together.

The framework can be applied to:

• supplier – customer relationships (especially those where you believe a strategic partnership may be warranted)
• mergers or acquisitions of companies

The basic idea is that success is more likely to occur – and be sustainable over time - if there is alignment, and compatibility, across three key dimensions: strategic, operational, and cultural.

I first raised this topic about two years ago in this blog. It seems like a good time to revisit.

The strategic dimension relates to the overarching business strategies of the two parties. This is often the easiest to evaluate and assess, since it is typically well communicated. And, business strategies can be adjusted to fit new circumstances. 

The operational dimension relates to the day-to-day integration of the two companies’ systems and procedures. While not an easy task, it can generally be straightforward to understand the current state of operational alignment and make necessary changes to achieve integration.

The third dimension is the one that often causes relationships to disintegrate: cultural compatibility. Think Daimler / Chrysler, whose “un-merger” was at least partly due to a clash between the two companies’ business culture. You can perhaps think of various supplier – customer relationships which were touted, at their start, as a “great partnership” only to have a boisterous divorce some years later.

The point: if you are contemplating investing in a business relationship, include the dimensions of strategic, operational, and cultural alignment on your due diligence checklist.

For related articles click here.

 



About the Author

image
Robert A. Rudzki
SCMR Contributing Blogger
Robert A. Rudzki is a former Fortune 500 Senior Vice President & Chief Procurement Officer, who is now President of Greybeard Advisors LLC, a leading provider of advisory services for procurement transformation, strategic sourcing, and supply chain management. Bob is also the author of several leading business books including the supply management best-seller "Straight to the Bottom Line®", its highly-endorsed sequel "Next Level Supply Management Excellence," and the leadership book "Beat the Odds: Avoid Corporate Death & Build a Resilient Enterprise." You can reach him through his firm's website: http://www.GreybeardAdvisors.com

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

While the Port of Oakland agrees that Saturday gate operations might ease congestion, they have a few "concerns" of their own

The four international marine container terminals at the Port of Oakland have announced they are developing a program to operate their terminal gates on Saturdays to reduce weekday congestion at the port.

Private fleet managers are facing a remarkable set of challenges in today's demanding business environment. The "from any place at any time" omni-channel fulfillment mindset is just one significant development that companies have had to adapt to in their quest to keep customers and business partners happy.

This is the first guaranteed weekly service direct to the U.S. from Singapore as part of the company’s initiative to enhance its LCL offerings serving Trans-pacific needs.

The city and Port of New Orleans have been roaring back since the catastrophic Hurricane Katrina struck ten years ago.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.