Awareness

Clause 3 – Strategic – Integrating collaboration with the business

Awareness

Clause 4: Knowledge

How does relationship management fit with your business objectives? This initial stage of BS 11000 will help you identify a clearly-defined rationale for proceeding that’s consistent with your overall business objectives.

Collaborative approaches will cut across every function in an organisation. The initial key is to ensure that an organisation has a clear mandate and strategy to undertake a collaborative engagement. This has to be demonstrably aligned with the visions, values and objectives of the business. Collaborative working in any form is not an easy option; it requires investment, resources and frequently changes within an organisation – as such it needs backing and focused direction.

To capture the concepts, and provide a platform for development with the partner(s), it helps to create a Relationship Management Plan. This would include a relationship governance model, joint and individual objectives, roles and responsibilities and mutually agreed policies and processes for managing the relationship.

Key Components

Establish executive responsible and organisational policy

For many organisations, the traditional view of trading relationships is one of price-squeezing and exploiting power. Implementing collaborative approaches needs strong support from the top to overcome internal constraints and support appropriate resourcing.

Identify business objectives and value proposition

It is crucial that the adoption of a collaborative approach is clearly aligned with business goals and objectives. In this way, everyone across the organisation can appreciate the potential for a value-chain or value-network approach.

Promoting collaboration may be at odds with current thinking. As such its benefits often need to be sold across the organisation. This process must set out the long-term advantages and be articulated and understood.

These advantages may cover a range of opportunities including overall operational cost reduction, resource optimisation, improved performance, expanded capability, joint product development and streamlined management.

Promoting the benefits may be particularly difficult where integration with external organisations could affect internal resources. So adopting a value-chain approach must offer greater benefits than a more traditional supply chain model. It should focus on a robust analysis of a cost-effective solution.

Identify and prioritise relationships

Historically, terms such as partnering or collaboration have been used incorrectly and too liberally when not necessary or appropriate. This misuse has led to confusion, misalignment of goals, expectations not met and a lack of robust management.

In the context of purchasing and supply, it is important to focus only on where collaboration can add real value. If existing purchasing approaches provide a competitive outcome, it would be wiser to avoid the complications and efforts of a collaborative model.

A clear differentiation of relationship types enables organisations to focus resources more effectively. Generally this will be driven by analysing:

  • Complexity
  • Interdependence
  • Risk
  • Total cost of ownership
Establish resources, competencies and behaviours

Working collaboratively may not suit everyone. The skills involved in partnership working can present a challenge for some in the purchasing and supply community, although they may be excellent in other areas. In a collaborative relationship, the focus is on mutual benefit and leadership through influence, stakeholder management, conflict resolution and balancing risk and reward rather than edicts.

The key traits to look for include information-sharing, communication, open and honest feedback, recognising partners’ objectives and maintaining long-term objectives. Similarly, key skills include being a team payer, a problem solver and good at managing relationships and conflict resolution. The role may represent a development opportunity for supply chain professionals.

Undertake initial risk assessment

Every business venture carries some risk and managing risk is a key aspect of sound business. Collaborative approaches can introduce alternative ways of managing risk, including a joint approach with partner(s). But they can also introduce new risk elements. These need to be identified and carried forward through the development of a collaborative model.