Invest in your human supply chain
Richard had worked for a major building material supplier in the construction industry. The lesson he learnt that stuck in his mind was on the importance of sound credit control management. That meant understanding the value of financing and prompt collection of payment.
The supplier was in the middle of the supply chain between the manufacturer and the end construction company. This meant he had to manage stakeholder relationships along the supply chain that included third party trucking companies. Making sure the materials were delivered and payment collected in a timely manner was crucial to maintaining profits.
Supply Chain Stakeholders - Industry Knowledge
Richard started his own company supplying building material to medium sized construction businesses. He effectively financed the construction projects his customers undertook as he gave them credit on the sales.
Richard invested time in selecting customers who had a reputation for paying promptly. This required knowledge of who in the industry had a good reputation for delivering on a project. As Richard explained, “You want customers who are successful. These were the ones with the money to pay you”.
Richard tailored his supply chain and credit control system based on his past experience with the major building material supplier. He only supplied material from manufacturers who were established in the market. This ensured the quality of the material supplied.
The entire sales transaction from order to delivery was documented and the trucking company making the deliveries had to make sure deliveries were acknowledged by the customers. Richard invested time in explaining the importance of documentation to the people involved in the supply chain from manufacturer to customer.
Business succeeds when every individual in the supply chain buys into the system and performs to the terms agreed.
Stay focused on maintaining stakeholder relationships to sustain business profitability.
Human Value Chain- Product Knowledge
Richard had a clear vision of the direction his company needed to go in terms of growth. He was always open to learning about new industry practices and the technology platforms available for communicating his decisions not just to his team members but also to all the stakeholders involved in the supply chain.
Richard constantly communicated innovative ideas to individuals along the supply chain. The idea is to get all stakeholders to accept and implement innovate ideas in a manner that adds value to the supply chain. Too often a technology platform is introduced before there is acceptance of the productivity benefit by the individuals involved in the daily use of the platform.
In business innovation should act as a motivator that spurs stakeholders towards improving the efficiency of the supply chain by ensuring they remain a strong link.
Sustaining Supply Chain Relationships- People Knowledge
To ensure stakeholders perform productively show them how they will profit from the action. This is the essence of competitive leadership in finance, operations and people motivation. All change in a work function should benefit both the business and the individual involved in performing that work function.
It is important to fire up the imagination and enthusiasm of your suppliers and team members so that they go that extra mile to give customers exceptional service. When a business delivers quality it becomes easier to collect payment.
Such a competitive leadership investment in stakeholders promotes long term high performance that adds value to the supply chain and increases profits.
Consultant, Author, Speaker
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