Every business has suppliers and stakeholders that they enjoy working with. They are the ones that seem to understand your needs and expectations. These partners know when to question instructions and check before moving forward. You trust them to do their best.
Wouldn’t it be wonderful if you had a trusting relationship with every organization in your supply chain? There would be no need to stress about the work being done. You know it will be as expected.
Building trust takes time. It comes from positive work experiences that confirm that a company can be trusted to deliver as promised. Trust is strengthened when a problem occurs. No business is perfect: but, trustworthy partners accept responsibility for their mistakes and work to fix them.
Not only does building trust take time, but the process also requires demonstrating the following:
Incorporating these elements into business relationships is one way to build trust in a supply chain.
Trust begins with transparency. According to Alexis Bateman of MIT, transparency requires two components — visibility and disclosure. Businesses first have to identify and collect data from every supplier in the supply chain. Then, they must communicate the information to all stakeholders, both internally and externally.
Some companies such as Nike and Apple create maps showing each contributor to their supply chain. They include pertinent information on supplier performance so that improvements can be made. This mapping creates a complete picture of the organizations within a supply chain. It doesn’t show the flow of goods but identifies the actors at each stage of the process. This process highlights the relationships among suppliers.
Supply chain transparency is one way to enable communication among suppliers. With open discussions, all parties can tackle issues that impact pricing, quality, and competitiveness. If a supplier is unwilling to share data, a company has to wonder why. What is the supplier trying to hide?
McKinsey surveyed more than 100 large organizations in multiple sectors about collaboration in their supply chain. Companies that regularly collaborated with suppliers experienced higher growth, reduced operating costs, and greater profitability. However, achieving high-level collaboration was difficult, with many organizations lacking trust that everyone would put the collaborative goals ahead of their individual goals.
To be successful, companies need to start with small collaborative efforts to demonstrate a willingness to be transparent. L’Oréal uses transparency to build collaboration through its supply chain. At an annual exhibition, the cosmetic company previews consumer trends that will be addressed in the coming year. The company then asks its suppliers to create packaging solutions to support those trends. L’Oréal’s willingness to share its upcoming product offerings and insights illustrates its desire for transparency and its value on collaboration.
When companies are unwilling to collaborate, they need to ask if it is them or their suppliers. If the hesitancy comes from a lack of trust in the supply chain, maybe it’s time to reassess suppliers.
Transparency and collaboration can demonstrate a willingness to build trust, but it is accepting responsibility for failures and successes that determines how trustworthy a supplier may be. If a supplier refuses to take responsibility for an error, it weakens the relationship.
Everyone makes mistakes. A company demonstrates they can’t be trusted by refusing to accept responsibility for a missed deadline or a damaged shipment. It may be human nature to blame others rather than own a mistake, but it isn’t very ethical. If suppliers fail to acknowledge their part in an error, can they be trusted?
Conversely, companies that take responsibility for a mistake demonstrate integrity. They show others that they can be trusted, even when they may suffer negative consequences. In a trusting environment, suppliers can work together to rectify the mistake and discuss ways to ensure it doesn’t happen again.
Emotion researchers define empathy as the ability to sense what others are feeling or thinking. Empathy may be cognitive, or it may be emotional. In other words, people can understand what a person might be thinking, or they can feel what another is experiencing. In business, empathy is understanding a relationship from different perspectives.
As companies look at their supply chain, they need to be empathetic and expect empathy. They need to understand what their suppliers may be going through. For example, eBay saw small businesses failing at an unprecedented rate in early 2020, so they launched an accelerator program for small businesses. The program called “Up and Running” offered small businesses a free platform for moving their companies online.
In the same way, suppliers should identify with their customers’ priorities. If an organization values product presentation, does the supply chain reflect that? For example, are suppliers dedicated to displaying the product, in the same way, every time it is shipped? Are they more concerned with getting it out the door than getting the presentation right? If so, suppliers may not be as empathetic to their customers’ goals as they should be.
How does reasoned thinking build trust? Logic equals judgment. Can the companies in a supply chain be trusted to use sound judgment? No company can, or should, control every decision a supplier makes. Instead, businesses have to trust that companies will use sound judgment when faced with unusual circumstances.
For example, a shipping route is closed because of extreme weather. The logistics company has to decide how to reroute the shipment so it arrives on time. Can the company be trusted to make a data-driven decision? Are they more likely to react rather than respond to the situation? If the company cannot be trusted to make the best decision, does it belong in the supply chain?
Creating a supply chain that you can trust takes time. It also requires continuous evaluation. With the day-to-day pressures facing most companies, determining a supply chain’s trustworthiness can be pushed aside. Yet, developing trust throughout the supply chain is crucial to business success.
Over its 30 years of experience, Symbia Logistics has become a trusted 3PL partner for small businesses and Fortune 500 companies. Our commitment to our clients’ success forms the basis of our operations. We are proud of our transparent and collaborative environment that enables us to work with our customers to become trusted members of their supply chain. Contact us if you’re looking for a logistics partner you can trust.