Leading Orchestrated Supply Chains: The Keys To Success – Leadership Series Ep 16

[00:00:00] Chris Gaffney: Welcome to the Supply Chain Careers Leadership Podcast. And I’m your host, Chris Gaffney, and I’ll be joined by my co hosts, Mike Ogle and Rodney Apple. We’re excited in this series to talk about a number of key impact areas for leadership and development for supply chain professionals, students, and employees.

We’re going to talk about how you can work more effectively as an individual. To create your own space for development, how you can differentiate in the workforce, how you can chart your own path to grow and develop, and how you can guide your own career. So sit back and enjoy the ride.

[00:00:38] Mike Ogle: This podcast is made possible by SCM Talent Group, the industry leading supply chain executive search firm.

Visit SCM Talent Group at scmtalent. com.

[00:00:51] Rodney Apple: Welcome back to the Supply Chain Careers Leadership Series, featuring our host Chris Gaffney. I’m Rod the Apple, alongside of Mike Ogle, your co host. And today’s episode will cover leading orchestrated supply chains. Just as a reminder, if you have not listened to these episodes before the first 10 cover the various ways and tactics to lead yourself, the second 10 cover.

How you can improve your ability to lead others. So we do recommend that you go back in and listen to these. If you haven’t already, they are timeless in terms of advice and tactics for improving your overall leadership series.

[00:01:35] Mike Ogle: And with that, Chris, what. Is an orchestrated supply chain. And how does this topic fit in with our series at this point?

Mike,

[00:01:45] Chris Gaffney: the way I think about it, the baseline paradigm for operating a supply chain is that your company does everything and all the people that you interact with work for you or work for the same corporate owner. But the fact of the matter is that’s not the case for almost anybody in this day and age.

The true hard asset end to end supply chain is actually very. Uncommon, there are some situations where that exists, but in almost every supply chain that I interact with, there are other companies involved. Clearly suppliers, raw material input suppliers, but in many cases. All aspects of the supply chain are up for grabs for some partner to play a role and for some companies, the true asset light companies.

The entire strategy is to leverage other companies, and frankly, in general, I think the trend is partners play a different or a growing role in many supply chains, both in providing physical activities and increasingly in providing administrative work and even knowledge work. This is a pretty relevant topic for our audience because it’s how do you interact and influence people?

Who don’t work for the same company that you work for. So that’s really what we want to get into today. And my experience would say is part people who are really good at dealing across cross functional lines within a company are successful. But if you can deal effectively across Commercial lines and influence people who you work with to get your product and service to the ultimate consumer.

You can really differentiate yourself and accelerate your career. I think that’s really how this topic fits into the overall intent of the series.

[00:03:36] Rodney Apple: Yeah, Chris, if I had to summarize that it’s first 10 episodes is leading yourself. The next 10 is leading others and we’re diving now into leading

[00:03:46] Chris Gaffney: through others.

Absolutely. Absolutely. And even in that, if you think about it, Rodney, we talked about leading teams, then leading extended teams, influencing cross functionally. And now we’re into the Wild West of having to deal with people who are completely different companies.

[00:04:04] Rodney Apple: Chris, sticking with our theme of leadership, what are the most critical leadership skills that are required to successfully manage orchestrated supply chains consisting of these third parties that we’ve discussed?

[00:04:17] Chris Gaffney: Yeah, and I would say the one aspect that I think is important, but is not a differentiator is all of these relationships are bound by a commercial agreement. And I think it’s important to get the right commercial agreement in place because that’s how you structure the economic motives and incentives for a relationship like this to, to be successful over time.

But in my experience, the irony is the best relationships, once you put that commercial relationship to bed, you don’t ever go back and look at that contract because you’re working at a different level. If I really think about the skill sets that are really important in dealing with these commercial relationships.

They really build down to, first and foremost, building trust, right? I mean, everyone has a lot at stake in these relationships, and so the people who start from a place of trust really have the best foundation to build that relationship. And so it really gets to people who have Strong interpersonal skills.

Communication is a foundation of trust that people understand where each party sits. You typically find when you’ve got a difficult relationship, communication lacking is a problem with that. So you’ve got to have somebody who’s got really good interpersonal skills, really good communication skills.

What follows beyond that trust is clarifying expectations and objectives. So what, what is each party supposed to do in order for the relationship to be successful? I think those things are foundational. I would also say. Ideally, for someone to be really effective here, they’ve got to have some pretty good kind of strategic thinking in mind.

These relationships deal practically in the very short term. They are, by definition, relationships that are intended to extend over time and ideally to extend over multiple years. So somebody’s got to be able to think a bit long term while at the same time dealing with tactical execution. And we’ve talked about those skills in some of the other episodes, but I think that’s a pretty important thing.

And I think the last thing for me that I think is important in terms of the key skills is the ability to put yourself in someone else’s shoes. Different companies have different cultures. And so understanding the people on the other side of that fence that are. Your partner, whether they’re upstream or downstream of your business, understanding a bit about the world in which they live in, how work gets done, how people are rewarded and motivated in that organization.

And make sure that the work that you’re doing with them reflects the realities about how they have to get things done within their own company.

[00:07:12] Mike Ogle: And Chris, in my classes that I teach in operations management and supply chain management, we talk about competitive strategies. And if you go back to fundamentals and think about this whole, how do you have the leadership skills?

Part of what you need to understand is should we even be outsourcing or partnering in the first place? What part of strategy. Are we trying to follow here and that’s changed over time and the way that we talk about it in our classes, things have become less internal and vertical and in favor of being able to have constantly looking out for the best provider of capabilities and it could be as simple as just, Hey, do we go buy somebody’s tool?

Or do we do something that’s just totally transactional? All you’re doing is this superficial relationship with somebody where you hand off something to them, or is it a really a true partnership? And I think it just trying to understand what should we choose is one of those skills that we have to know and how to go about it.

If somebody wants to take a look at a resource, a book like strategic management by Serto and Peter. Or they explore how leadership strategies have changed based on the way that you need to do this orchestration and reach across boundaries. You might be a helpful

[00:08:31] Chris Gaffney: thing. I think that’s a look at that’s a fabulous point.

Mike, the fundamental of understanding make versus buy. Ideally before you enter in the relationship, but as you’ve entered in the relationship, then you understand where this supplier sits. Because I think that gets into how you deal with the relationship. If you made a strategic choice for a partner who possesses really unique skills, how you manage that relationship is totally informed by that.

I think that’s a great build.

[00:09:01] Rodney Apple: Yeah, and, and, and for my experience working on the talent, you know, recruitment, executive search side of supply chain, uh, this is what we live and breathe. And when it comes to working with our clients, they could be large fortune 500 corporations, like you talked about many of these companies, they may not want to be in the business of owning everything in terms of their operations and are moving to more of a.

Asset light strategy. We work with a lot of small to midsize companies where outsourcing is the game. They may be a handful of people at the company and, and the rest of, uh, their operations and supply chain is outsourced on the manufacturing side, oftentimes overseas through in low cost country sourcing.

Areas and then using three PLS to get product to the customer. So we see this day in day out. I think the, the, the skills that you referenced on the leadership sides, communication, problem solving, being collaborative is at the heart of it. That’s my take on it from the talent side of things.

[00:10:05] Mike Ogle: So Chris, when leaders are working with a wide variety of partners out there, how can they go through the process of innovation?

Yeah. How do you build. And sustain that culture across the boundaries.

[00:10:19] Chris Gaffney: I think that’s a really critical element of anyone’s strategy and working with partners and definitely something that needs to be thought out. Before you’re in the middle of the game with partners, because most of the structure around those relationships deals with ongoing business.

How are we executing against an existing business? Whereas innovation is a different game. And frankly, the lifeblood of most businesses has to have some element of innovation to it, whether it be product or process. Ideally, you’ve got provisions for how innovation. Is handled inside of your commercial agreement.

And a practical thing for us at Coke is when you were running existing products. With a third party manufacturer, they got paid as they ran cases. And so that was assuming an existing production line that was running known packages, known products running. When it comes to innovation, the product may be different.

The process may be different. The package may be different. And we had to handle things like test runs that test runs take time in a production operation. And that time may not be. And is by definition, not as productive as running an existing product to be fair and square about that. You can’t go to the partner and say, Hey, give us all this time for free.

Particularly if the. The partner was busy, they would say, we don’t have the capacity, but then if the capacity existed, you were like, how are we going to be compensated? We have people sitting around doing this. There’s an opportunity cost for us that we could be doing something else with that. When we had ambiguity around that, it created friction and it slowed the process.

So getting that understood up front, I think is really important. I think the other thing for us, when we deal with partners is what’s their motive? For working with us on innovation, if it came to process, we want to find out how to get to consumers faster with our logistics partners. What’s in it for them?

Are they going to get more business as a result of this? Are they going to share in some aspect of the benefit? And I think in general, again, we wanted to be intentional about that, and we wanted to be proactive around that so that people could lean in around it. And ironically, when you deal in a big multifunction organization, some of those same issues exist around innovation.

People wanted to do their core work in their core business. Anything outside of that, it was how do you get that share of mind and how do you get that share of time? I think those are the things that I think are really important around. Working with a supplier to innovate,

[00:13:01] Mike Ogle: and I’d say when we talk about product and service innovation in our classes, and we really do have quite a balance of making sure that it’s both of those things because you may not come out with a new product.

You may be coming out with a different way of having it delivered or the timing or options that people could have. And all those types of things, you have to be able to make sure you can cultivate an environment that. That values innovation, you know, in supply chain networks, whether you’re just making incremental tweaks, uh, constantly doing continuous improvement that everybody does.

But every time you do make improvements, sometimes you’re making changes in the way that you’re delivering a service or a product. When you’re trying to run an orchestrated supply chain, you’ve got contracts that can be very stiff and unmoving. How can you get through the process of being able to come about putting together better.

Innovative contracting in addition, so that there might even be a little bit of flexibility when you’re working with partners, things that you could have changed internally much easier. Now, it’s a little bit more difficult again when you’re crossing boundaries. You have any thoughts about that? Chris, I think it’s huge.

And it really

[00:14:16] Chris Gaffney: prompts me to think about a couple. Aspects of this that are big paradigm shifts in many cases. Innovation is very sensitive and confidential and your existing mindset. Maybe don’t tell the partner until the last minute and then all of a sudden they’ve got to get ready to go to market. So you have to change your mindset.

Around how you’re dealing with your partners on things that are not yet visible to the market. I think that that’s something you have to sort out because you may have a lot of internal hesitance around that. And I think the other thing that comes to both of these areas that you talked about, and what I added, Mike, is the whole idea of the intellectual property, like, when the innovation exists.

Is it for the sole benefit of the brand company or does the partner get to use this new capability if they found a way to cut service time. Is it uniquely for you or is it reserved for you for a period of time or does the partner get to offer it to their other clients. Again, I think the main theme for that is understanding those rules of the game early on so that you avoid issues once you’re in the middle of it.

[00:15:31] Rodney Apple: And I would add to just when you think about your talent. That’s 1 way you can improve the innovation in between both internally as you bring in people from different backgrounds, different industries, comes from different walks of life and then you can go externally with that as you lean into your partners and sharing best practices, sharing data.

And things like that, I know, but going back to our Coca Cola days, we had those supply chain customer facing teams that would work with the largest customers, your McDonald’s, your Walmarts, et cetera, and purposeful and thoughtful around sharing ideas, best practices, data to make that mutually beneficial gains as it relates to their supply chains.

[00:16:14] Chris Gaffney: Yeah, that’s what the research always says. We say partnership, the research says partnerships are very difficult to achieve, in fact, because they require some element of balance. They require shared investment as well as shared savings. The practice versus the promise are very different, and that’s really where the leadership comes in.

That is addressed by thoughtful people managing in an ethical way to make sure that both parties gain as the relationship

[00:16:45] Rodney Apple: evolves. Thank you. Chris, digital transformation, we know supply chains and businesses in general have been moving towards digital for several years now. And this continues to advance as technologies advance.

AI has come on extremely strong and very quickly here in just the last couple of years. So what are the digital transformation challenges as well as opportunities when you think about supply chains that involve external partnerships? I think

[00:17:19] Chris Gaffney: there’s plenty to talk about here. The most obvious for me.

Are varying levels of maturity for each of the partners, and I’ve seen situations very recently where we went to a partner who was very capable from a technical standpoint, right? They could handle a production process that is very complicated, you know, high levels of regulatory approval and all that stuff.

But when you go back into their front office, They’re very immature from a digital standpoint, a lot of the information that they handle between their clients is at best email with Excel attachments and that type of thing. And so there’s a huge lift. If you say, I want to get to the point where I’m having much more real time interaction with this partner.

Because their investments have been on their technical capabilities and not on their digital side. And in many cases, there’s a big foundational investment for them to get into things that including cyber security, including just some of the foundational ways by which, in some cases, we’ve gone to partners.

We’ve had to help them increase the size of their Internet capacity because we wanted to be able to handle it. Much higher levels of data. I think first things first in that varying levels of maturity piece is just to deal with those foundational realities. And if it’s important for the more mature partner that a less mature partner in their supply chain plays, some cases you’ve got to lean in.

On that right you’re ahead of the game you have a motive by which you want your end to end supply chain whether it’s to have greater visibility or to have reduced latency and in data being shared you’ve got to lean in those are the two things that i see out there that are very real and truthfully a lot of the people that i deal with are what i would say mid market potentially if you’re if you’re an amazon or an apple.

You’re setting expectations and your partners need to be able to deliver on those expectations or they don’t do business with you. I’m talking about a level where you’re like, Hey, we don’t have the luxury of that. We have an existing network of partners. They’re good at what they do. We need them. So we have to take them where they are and get them started on a journey that allows us to get what we need.

And again, it’s fair and square for them. It’s got some return to the investment that we’re asking them to make.

[00:19:55] Mike Ogle: This whole area of digital transformation has really got so many areas of complexity to it and, and so many people, and both on the academic side and the, the reading that I do in a variety of different kinds of publications, seeing the challenges that people face.

There’s so many different applications that so many different companies. That they’ve taken a lot of time and expense to develop and they say, hey, if you can provide this information in this particular format and these transactions in my format. Everybody’s constantly back and forth, challenging each other on who has the power to demand.

What kind of information shows up in what kind of form at what time that it’s, it’s really interesting to see how this is playing out over time. And I’m wondering whether some of the AI tools and such are, are going to be able to understand how to automatically do some of these kinds of translations, you know, as we go forward.

But that’s future for now, I think our guests, or I’m sorry, our, our listeners are probably trying to just try and. Learn a little bit more about what it means to be able to have that kind of visibility and learn about terms like digital twins. And what does it take to really develop these kinds of capabilities and what you can truly demand contractually and with partners.

I’m not sure if you have some thoughts about that, Chris.

[00:21:21] Chris Gaffney: Yep. Mike, the point that you just made it the whole data harmonization piece is foundational as well. And I think, you know, what you can demand is variable, right? If you go to a supplier and, you know, there’s a fixed cost investment for them to get into the level of capability that you’re requiring, it’s not feasible.

You may be super powerful in that relationship. You know, you could put somebody out of business if you wanted to. But so what you can demand has limits to it. And I think that’s where I think again, the art and science of how you lead. And in many cases, the person who is in charge of the partnership may have to.

Be an internal advocate for a partner in terms of hey this partners really important this is where they are today in most cases those partners are not recalcitrant they’re not saying i don’t want to do this but that you’re just saying this is not where i am today let’s agree on a journey let’s agree on a road map let’s agree on a plan for me to get where i need to be and potentially help them we’ve clearly seen big companies put together supplier portals that lean way in and help Um, those partners come up to speed without so much effort on their part.

So I think it’s just being pragmatic and balanced in that. And I think Mike, you mentioned the AI side of it. I actually am aware of a company that is no longer a startup. They’ve been in it for four or five years and they’re in the indirect materials procurement space and a big part of their game was.

Small suppliers, somebody who’s selling you nuts and bolts in that type of thing. And you might buy nuts and bolts from 5 different companies and they all call it a little something different or whatever. Their AI was absolutely focused on how do you do the Rosetta Stone, the translation, the normalization.

So you could say. You’re actually buying the same thing from these five different people, and we can help you think about that in a more common way and get some leverage out of that. So that is a ripe area that I think is actually quite active right now.

[00:23:36] Mike Ogle: During this short break, we recognize that this podcast is made possible by SCM Talent Group, the industry leading supply chain executive search firm.

Visit scmtalentgroup. com.

[00:23:52] Rodney Apple: Chris, sustainability has been a very hot topic for many years within supply chain and it seems to just becoming, you know, hotter by the day. You think about things like the circular economy and things of that nature. So when you have partners and you have sustainability goals, how do you maintain progress through others?

Yep. And again, in my

[00:24:14] Chris Gaffney: experience, sustainability started at home in the portions of the supply chain that you could control because you own them and you’re going into your own plants and you’re going into your own logistics operations and you’re looking at your own package specs and saying, there are opportunities for me to reduce my resource, improve my recycling and recapture of waste that’s out there.

And that is hard when you own and control it. And so that knowledge is important when you then want to go to suppliers and say, I want you to accomplish the same things on my end. And, and obviously the large public companies are now increasingly accountable for their tier one, tier two, and and beyond.

Suppliers. And so they’re all in this game. Many of them have been in this game for a number of years. And I think a lot of the parallels that you use on your own internal journey apply with suppliers. You know, my experience on our early days of sustainability is that there were win wins. There were productivity driven efforts that also had a sustainability benefits.

If I’ve PL what we did in all of our warehouses was put in. led lighting and led lighting had an in year payback. Now that’s years away, years ago for most folks, but that’s the first kind of thing is get the easy wins in it that actually have an E a clear Econ, existing economic return for a partner such that they don’t have a lot of pain and heartache in doing that.

And you can clearly say my partner is now reducing, you know, their energy use in support of my business. Um, when it came to areas like logistics, we worked very hard. One collaborative mileage reduction. So again, we’re taking carbon off the road. We’re taking empty trucks off the road. And actually, in most cases, the real pain for people was more schedule coordination and that type of thing.

Everybody had an economic motive. So we start with the easy stuff and that also. gave us a starting point for measurement because in most cases, you’re going to suppliers and asking them to measure and provide information that they haven’t historically. But if we can do it against things where there’s a win for folks, I think that was always the easy starting point.

For us, I think another thing that was interesting that I’ve seen particularly, probably a tier two and beyond in many cases, we were asking suppliers to change their behaviors to be more sustainable. And when we got to tier two or tier three, we were not that big a slice of the pie. For that supplier and in many cases, the other people that they were doing business with at that time, we’re actually competitors of ours.

So I would also say at the tier 2 or tier 3 level that may become 1 of those rare areas where you may use an industry association that has the right and I trust all of you. Protections around it to actually try to get to some common standards. So at that tier two or tier three, the supplier is being asked to change their process, but to do it in common for two or three of their largest customers.

Much greater chance to get them to do something Different, um, at that level. And so we clearly saw that in a number of our agricultural supply chains that the changes we were looking for at that level were done at an industry level and found that to be quite successful. So those are some thoughts that I would have in terms of how we get going and make progress on sustainability with partners.

And when

[00:28:00] Mike Ogle: I talk about these kinds of things in my classes, as far as sustainability is concerned, I always emphasize. That to me, there’s 2 kinds of sustainability. 1 that everybody tends to think of 1st is the making things green or sustainability and impact as well on, you know, whether it’s. Dei kinds of issues or a variety of others, people tend to go that direction 1st.

But to me, also being making sure that when you talk about sustainability, is this something that we can sustain this partnership? What are the threats? That could possibly be out there that could make the partnership end up being strained. And so 2 kinds of sustainability, I think, is always good to be able to take a look at certainly the green side.

But also, is this a practice or a relationship? That can be maintained over time. And what would make that be stronger? What kind of steps could you take to be able to maintain it or even make it stronger? Yeah, I

[00:29:03] Chris Gaffney: mentioned it when it comes to partnerships. It’s virtually impossible to get an equally balanced relationship.

So there’s always some difference in power, and it’s very difficult for the partner with the greater power to not abuse that power, whether that be intentionally. Or unintentional and Mike, when you talk about things like mandates and that type of thing, and you play 90 games of basketball and you break ties and the more powerful partner wins 91 to 90 in every game.

And he says, boy, we have a lot of competitive games. Isn’t that great? And the other partner says, yeah, and I lose them all. The sustainability is at risk in the long term because you can ultimately have a supplier who just says, No. And if that’s not, and usually because it’s been an imbalanced relationship, there hasn’t been clear.

Communication or good listening around a supplier saying, Hey, this is not working for me. Then you may no longer have a partner and you may your lower case s sustainability may be a problem. Your higher your capital s sustainability may be a problem either because you may then have to go from what was actually the best, most efficient supplier to somebody who is not really able to support your objectives.

So I think that’s a great build.

[00:30:23] Mike Ogle: How about we move on to risks and uncertainty, you know, as all the partners come together, trying to achieve all their various objectives. How do supply chain leaders figure out how to detect, measure, manage, mitigate all these different things of their individual and shared uncertainty and risks across all these supply chain partners?

[00:30:46] Chris Gaffney: Yeah, I think it goes back to some of the things that we’ve already talked about and then I think there’s things we build on beyond that being proactive is a huge part of risk and resiliency. And Mike, you and I did a podcast with an industry veteran in this whole area. First thing you’ve got to do is have a clear understanding of your supply chain.

I know many companies who I am associated with during the challenges of the last few years, they got out to tier two or tier three, and they were not even aware of some of the risks they had. With their tier 2 or tier 3 supply chains because they were managed at a very low level in the organization.

The actual spend was through somebody else. And you went to a tier 1 partner. And in some cases, we’d have 2 tier 1 partners. So we’d say good. We’ve spread our capacity across 2 partners. Then you’d find out that there’s a key input that both partners needed. It came from one company, so you actually thought you were creating resilience by splitting your business, but you didn’t know that they were completely dependent on a single supplier.

I always look when there’s a fire at an industrial location anywhere in the US, I get online real quickly and say, what do they make? And you’d be shocked. You can find that quite quickly. And all of a sudden, in the fine print, This plant is the only plant in the United States that makes this product. I’d say, who uses that product?

And all of a sudden you can very quickly find large brands that are dependent on your liking. I bet you there’s some folks who are scrambling today. So first thing you’ve got to be able to do is actually understand the mapping of your supply chain. And at the last level of your contractual relationship, you’ve got to have your contracted supplier either contractually be required.

Or have the right level of trust, they will let who is beyond where you are. So you can have at least a sense of where are we there. Beyond that, you want to establish an expectation that the parties for critical inputs have gone through a structured risk assessment. And we’ve seen those out there. There are in public.

They are not hard. They can many cases be done at a high level pretty quickly to identify areas that require further identification. So it’s visibility in some base level risk assessment. I think is critical if you’re going to run an extended network of partners is part of how you get to market. I think beyond that, it does come back to some of the things we’ve talked about.

You’ve got to have trust. I have worked with suppliers to companies who I also did business with. And it was amazing to me where I could sit in a supplier’s office, and they would say, I wish we knew what the customer was doing about this. And you could go to the flip side, and the customer was doing their planning, and they were saying, we have this assumption around the supplier’s capacity or available inventory.

And I could say, both parties possess information that the other need. And both parties are guessing about known information that is not really confidential and that gets to do you have the right information sharing and have you addressed trust and maybe even some education around why someone might want to know about something that’s there.

I think that’s important in many cases for the again the supplier lower on the power curve. When they had bad news. You’ve got to establish the conditions that they can share that bad news early and not be punished for it, because in many cases in this risk and resilience space, when things go wrong, time is your greatest resource.

You have to have established the trust in the relationship where someone is not going to be immediately penalized when they come back and they say, hey, we’ve got a line down or we’ve got a significant issue you need to be aware of so that we can jointly plan alternatives.

[00:34:54] Rodney Apple: Yeah, I would just add when you think about your supply chain teams, just ensuring that you’re hiring people that put this on the front burner versus the back burner, you mentioned it earlier, Chris, you have to be proactive.

Versus reactive. I’ll share a little story from back in my coke days. I was asked to find a supply chain, like risk manager. I think it was the first time the company had hired this type of resource. I said, Oh, this is neat. This is a different role. And I went to market, this was probably, I don’t know, 20 years ago.

And I just remember looking across the usual suspects, large CPG, the big corporations, and I was completely shocked at the lack of people that existed that held this specific. Responsibility. I think if you fast forward to today, you’ll find it in pretty much every major company. And I would also we didn’t talk about this.

Speaking of partners, there’s lots of great partners out there today where this is their sole focus supply chain risk management. They’re staying focused on the trends. And issues, vulnerabilities, and those are great companies that you can lean on. And I think having people that have those connections and relationships that can bring that innovation when it comes to risk management to your supply chain, it is something that’s critical without having proper risk management.

We’ve seen companies go under and out of business as a result. Just wanted to add that piece.

[00:36:22] Mike Ogle: And one other small piece, Chris, since you’d mentioned the podcast that we had done together, Greg Schlegel was the person who had done that. He is the founder of the Supply Chain Risk Management Consortium. So if people are looking for a resource, one, they could listen to the podcast that Greg had done with us, and then also check out the consortium.

So, Chris, we know

[00:36:45] Rodney Apple: that with external partnerships, The odds of something negative happening is pretty high, right? Supply chains are very complex and we hear about problems all the time, especially in the last few years, since the COVID era, uh, disruptions all over the globe. So what are some ways that leaders should be thinking about and improving how they manage conflict conflicts with their partnerships so they can make those improvements and sustain their operations in a positive way?

[00:37:19] Chris Gaffney: I think there are a couple fundamentals, and then there are a few kind of more advanced thoughts on it. I think the first thing is making sure that if there is some level of misalignment, conflict, friction, whatever the descriptor is, that it gets on the table quickly. We know in any human relationship, anything that festers is typically going to get worse and not get better.

And so the people involved in managing the relationship, as soon as they see or hear on either side of the fence that something is there, is get it into the right lane. Where it can be dealt with. And so I think those are really point one and point two. I’ve seen a lot of situations in relationships where I’ve managed, there’s a conflict that’s raised and it’s not raised to somebody who’s to somebody who could do something about it.

So not only you have to raise it, you’ve got to get it into the hands of somebody who has the appropriate role in the relationship to be able to act on it. I think that’s 1st and A and 1B. I think the second and easiest thing is to make sure that there’s a clear understanding of what the friction or issue is, because a big chunk of them are just misunderstandings and miscommunications, and the last thing you want to deal with if it has something that is actually a complete failure to communicate, or as we say, people talking by each other or a misinterpretation or something creating a larger issue that doesn’t need to exist at all.

If you can get those two things. Moving you a get it to the table quickly and get a bunch of things off the table pretty quickly. So then you lead yourself to now we have a clear understanding of a legitimate issue that needs to be addressed between two parties. And it might be. Performance related.

We’re not serving the customer. We’re not making quality products. We’re not delivering on our commitments for capacity for certain product, and they may be financial issues. They may be saying, Hey, I’m doing something and I’m spending. I’m being asked to do a lot more that was in than was in our agreement, and I’m not getting compensated for it.

I think. When you get to those real issues, then the person managing the partnership typically has a delicate role because they’ve got to deal with a partner who is not happy. And in many cases, they’ve got to deal with internal stakeholders in their own organization who may have to be involved in a solution.

Because in some cases, most cases, when we have that conflict, there’s going to be some horse trading that needs to be dealt with in order to resolve it. Okay. If it’s small, you may say, Hey, in this case, we’re inside of our contractual term. I’d love your support to lean in on this and the next time you’ve got something that requires us to take a break, then we’ll take that one.

And if you can do that informally over time, if you’ve got, again, the right level of trust between the organizations and the people, you can say you win this one, we’ll get the next one kind of thing. If it gets to a higher level and it’s more significant, then I think you’ve got to figure out how large the issue is and what other people have to get involved.

And I’ve seen this on both sides of the coin. Your last place to take it is the CEO to CEO, but I’ve seen him go to that level. But ideally you understand where in the organization can we go to somebody, get the right fair hearing for what has created the conflict. Knowing the relationship, balancing the importance of the relationship with what’s at stake and coming to some level of alternative agreement, right?

Maybe a compromise, but you may say, Hey, listen, we are serving Walmart through you and. We’re not delivering against them. We have to get right with Walmart. And if that requires you to run overtime, or if that requires something different there, then we need to understand what that cost is. And we need to find a way to bear the brunt of it.

So that’s a simple kind of ladder that I would think about for the issues that I have had there. I will say, having been in that kind of translator role or the partner role, A lot of times we do have to educate. This is the real cost that this supplier is incurring. They’re not making this up. And if we don’t address this over time, it will place the relationship at, at risk.

Some cases you’ve really got to do a lot of analysis and explanation internally to get advocacy for somebody at a higher level to support a resolution like that.

[00:42:14] Mike Ogle: Well, you talk about one of the premier soft skill capabilities in supply chain being able to deal with. Uncertainty and conflict and surprises and things that come up and how to resolve them and how to bring that kind of issue to others and work through it so that everybody still wins.

You maintain that focus on what’s the real objective of what we’re trying to do to make this partnership work long term. I think this is one of those that people really have to pay some good attention to and test themselves to understand and think about what they’ve seen. That they do themselves of both good and bad ways and others so studying that and seeing how that’s done really well in supply chain.

Is it like a premier capability for leaders?

[00:43:04] Chris Gaffney: I think the build on it, Mike, is you’ve got to keep the emotion out of it as much as possible because that’s not going to be. Additive in many cases, you’ve got to say, understanding what’s our worst case here. What are we willing to give up? Are we willing to walk away?

And in almost all cases, it’s not that. So then it’s a matter of what’s at stake here versus. A long term relationship, both looking forward and looking back, and let’s not have people be short sighted in terms of getting the win over. Somebody is there. And so you’re right. It is a huge differentiator when somebody gets good at this.

And in many cases, what I’ve seen is you have to do the extra legwork to say, this is why These are the facts around why this has to change for us to be able to continue to be successful, both in the relationship and what the supplier or partner is providing for us.

[00:44:02] Mike Ogle: And Rodney, I was curious, are there any kind of key words that you tend to hear when people talk about when they’re trying to find talent to be able to fill roles?

Sometimes there are words that make it clear that somebody is good at this or not.

[00:44:17] Rodney Apple: Yeah, no, that’s a great question, Mike. I think in general, problem solving is always at the heart of a, of the supply chain practitioner and leader. And so I think working collaboratively with strong communication, leveraging empathy, as we’ve talked about, is critical to mend these conflicts and, and move forward in the right way.

I think another thing that we could touch on that we, I don’t think we’ve talked about today is how can we mitigate these conflicts in With our external suppliers, and surely most companies these days are leveraging various cadences, supplier visits, quarterly business reviews, balance scorecards, the usual suspects, and then obviously going back to what we talked about earlier with just sharing data in a very timely way.

These are ways that you can try to mitigate and get out front in a proactive way, back to that risk management topic before you get into these, but being able to mitigate them is one thing, as we talked about, they’re always going to pop up, bad things are going to happen and how you manage through that is, is really paramount to a successful supplier relationship.

[00:45:25] Mike Ogle: Yeah, excellent. And moving on to our last topic for today, we wanted to take a look at thinking about when our own teams of people within our company may be spread out around the region, the country or around the world. If you add in the fact that partners may also be from around the world, and it has to make it challenging to be able to coordinate all those relationships.

Chris, how can leaders better manage diverse and geographically dispersed teams of partners? Yep, I think

[00:45:57] Chris Gaffney: there are a few things that I have found to be really successful. I think the first one is to just practice the golden rule. Be aware and be thoughtful around the realities of the fact that people are not together all the time.

And it may be as simple as if we have multiple time zones. Either find a balance where it’s the minimum burden on either partner. What I found in situations where we had a partner on the west coast, partner on the east coast, and somebody in Europe, and there’s only one time slot that’s fair to everybody, and it’s in the 11 to 1 window.

And you’ve got to be fair about that. You can’t be somebody who says I can’t do that window if I’m in the East Coast because it’s eight o’clock in the morning for the folks in the West Coast and 4 30 in the afternoon or whatever it is, four o’clock in the afternoon for the folks on the other side.

You’ve got to be fair around that or you’ve got to balance it with the folks in Asia where it’s 12 hours off, you’ve got to do your morning there evening sometimes and you’ve got to flip it. Other times, if you’re really going to be conveying to that partner that you’re respecting where they are, building on top of that is knowing if you’re different countries, knowing when the holidays are and being respectful to other folks, holidays and that type of thing.

So I think that’s the basics that I think are important. I think when it comes to scheduling our meetings and our interactions with folks. Is you’ve got to have some social time at the front of that. You’ve got to give the courtesy of, Hey, what’s going on, what’s going on in your world, the soft stuff matters in that you can’t just jump right in to everything that’s out there.

I think beyond that, the reality is you do have to have some face time. If a partner is important to you, there’s gotta be some live interaction to cement that relationship over time. And I would typically say, it’s got to have a home and home. You come to my place. I’ll come to yours. And it’s got to have some breaking bread with folks and I would even tell you when I go to some places, some partners place and I want to invest some time with them.

And it does involve sharing a meal. I actually try to do it really early. In the day, so that they can get home to their own home. If I’m going to be in a hotel, that’s 1 thing, but I don’t want to be doing a 7 o’clock dinner with somebody who we have to come back into the office the next morning at 8 o’clock in the morning.

They get home at 11. that doesn’t play. I’d much rather say, hey, you know what? We’re going to be here, but in our either dinner meeting, which is either before the 1st day of the meeting, or between 2nd day, for example, we may be getting the old folks special and showing up at the restaurant. Early. I’ve even seen that in Europe, where the normal customs for restaurants are much later.

We’d actually arrange ahead of time with a restaurant to open early so that we could get in there. So I think those small things. Matter as much as anything else, I think the other thing that I think it’s important when you’re a distant a lot is you may be having a lot of meetings where you’ve got the relationship manager on both sides, spending most of the time, you’ve got to get airtime for the other people in the relationship.

And in many cases, I’ve even encouraged had the discussion with a mentee yesterday. Is don’t just have a great relationship at the primary relationship level, get the people a click down or two clicks down to do some of those same things up to including having junior people, a planner or somebody like that.

Take a visit to that location, meet that person that they’ve only ever interacted with over the phone or on a zoom call because that personal relationship is what bridges that gap.

[00:49:57] Mike Ogle: I think 1 of the thing to for people to think about is that you can’t just have 1 solution that fits all because there is that diversity.

And different ways of thinking, you can’t say, I have a weekly meeting always to be able to have an update for some people that may not work. And for some kind of relationships that may not be necessary at all. So, you really have to think about those individual relationships and what does it really take to be able to feed and maintain them?

Yep,

[00:50:27] Chris Gaffney: so much of this, as we’re coming to the end of this, they are mostly the same skills. You need to be successful in your own organization with some amplification of a few of these dealing with the fact that people work for another company or maybe in another place. I think that’s the good news about it.

And I think 1 of the things I would say. For someone who has not played in this space and then has the opportunity to do it, this is a great opportunity to demonstrate your agility, because what you will find is, if you practice the basics, you show respect for folks, you use the golden rule, you’re respectful of other people’s time, you’re intentional, you’re proactive, words we’ve used in other episodes, those things are all going to put you in good stead in managing these relationships and building Thank you.

That evidence that you’re a good business partner over time, that’ll allow you to say, gosh, I can now say I can do this. I can take on a bigger relationship and I can teach other people how to do this.

[00:51:29] Rodney Apple: Yeah, Chris, and I’ll segue in on that point right there. I could teach other people how to do it. Yeah.

If you’re new to this, I think that’s critical to have to lean on others that are more seasoned in these areas of managing global suppliers. Visiting other countries, understanding the different nuances from culture to culture, getting that exposure, just going out for your first time, can be intimidating, and leaning on others that have been in, already been in the shoes, have had many boots on the ground visits to other countries, is a great way to prepare yourself so you’re not walking in with a white sheet of paper, if you will.

Anything else, Chris, that you would add in terms of things to watch out for when you think about moving into these roles where you’re maybe the first time manager over a supplier?

[00:52:22] Chris Gaffney: Yeah, I think I’ll actually say two things. Number one, there’s a lot to be learned from the people who’ve already done this.

And so, I think it’s super important to have kind of a Sherpa or a mentor or a peer, if it’s an existing relationship. If it’s a new relationship, somebody who’s had a peer relationship that with a similar supplier, In your own company, if there are people who have worked at that company and you can get a little bit of an insight around how things get done and potentially the people that you’ll work with there, I think that’s always a good head start in terms of how you set yourself up for success on that.

But the second point I would say is less of a watch out and more of probably, uh. I would say some of the most rewarding experiences of my career have been in successfully starting up and maintaining for many years, a successful partner relationship. I’ve developed great friends in that. I’ve learned a lot in many cases about.

Other business. It’s nice to go into somebody else’s operation because you’ve got something that you can take back. I’ve said at the beginning that I think this is a differentiator. And I think for the those who spend time doing it, working with those partners gives you something invaluable in your own world at your company, which is an external perspective.

You could say, here’s what I’m seeing when I talk to our partner. Here’s what they say. Their other customers are experiencing. You can it. Add value and increase your own equity internally just by working in the day to day of managing these relationships.

[00:54:05] Rodney Apple: That’s good stuff, Chris. And just one more thing I thought about and partnering when you think about internal partnerships to enable and support these external partnerships.

Lean heavily and partner well with your sourcing and procurement teams. Absolutely.

[00:54:22] Chris Gaffney: In any large company, the procurement folks are going to be involved. The finance folks are going to be involved pretty quickly. The it folks are going to be involved. And so it’s typically a multifunctional relationship with that supplier anyway.

And there’ll be some senior level people over involved in it. And having that understanding of what. all those parties play or how they play in that relationship, what knowledge they have, I think is huge. And typically the procurement people are on the, on looking for anybody other than a customer.

They’re a key interface to those relationships.

[00:54:59] Rodney Apple: Yeah,

[00:55:00] Chris Gaffney: absolutely.

[00:55:01] Rodney Apple: Chris, this has been another excellent episode on leading and orchestrating supply chains. What do we have next in queue, uh, for our next episode?

[00:55:12] Chris Gaffney: So a little bit of a different topic, and I have Gathered as we worked on the overall series, some smaller topics that I think are, whether they be hacks or really critical skills that make a difference for a leader of others.

And I’m going to suggest we put those together in an episode around the soft topics that really can make a difference. And it, it may get into a variant on problem solving that I’ve used in a lot of conversations where I say the answer is in the room. And so we’ll talk about that. We talk about conflict resolution and one of the things I’ve seen is how people respond in stressful situations really matters.

So we’re going to talk a little bit about the space between stimulus and response, which is a very interesting neurological topic, but really important in terms of how you interact with. Others and when you’re a leader of others, you typically have more on your shoulders and there’s more at stake and we’ve had episodes on confidence.

But I think fear of failure is one of those things that can creep in and I think talking about how to proactively manage that is interesting. So that’s a flavor. We’ll pull in a few more and hopefully this is a bit of a mixed bag topic, but hopefully some good ideas in there.

[00:56:33] Rodney Apple: That sounds incredible.

Chris, for you listeners out there, we appreciate you tuning in. If you find this content interesting and useful, head on over to our website, scmtalent. com. At the top, you’ll see the resources and insights tab. We have a plethora. Of content on supply chain, career development, lots of insights and analysis.

So check that out. The leadership series is getting a lot of attention and it is an area where if you can improve upon, you can accelerate your career. So check it out. And if you like what you’ve heard on this episode, be sure to subscribe. If you’re not already subscriber drop as a rating and maybe share it with someone in your network that you think could benefit from this particular episode.

As always. Thanks for listening and we’ll see you next time around.

[00:57:17] Mike Ogle: This podcast is made possible by SCM talent group, the industry leading supply chain executive search firm, visit SCM talent group at scmtalent.com.