Corporate Culture Does Matter... Especially For Supplier Collaboration

We recently discussed the impact of culture on an organization’s effectiveness, a topic that has been debated for years. Current research shows empirical evidence that culture does matter. The area where culture impacts a company’s effectiveness most may be the area of supplier collaboration. 

The importance of the supply base is well understood. However, if the culture of a company says they play a “win/lose” game with suppliers, that suppliers should be ridden hard/ not coddled, or that supplier margins are profit opportunities to go after, then no Supplier Collaboration program can be effective.

Creating a culture of aligned goals and win/win interactions with the supply base is the only way to gain the significant benefits that key suppliers in one’s base can provide… benefits like new technology, being first to market with new products, consistent on-time shipments of high-quality product, having first choice of cost-reduction ideas and supplier investments in areas that will benefit a client’s business.

These benefits can separate a company from its competition, as has been seen many times with companies like Toyota, Honda and Deere. Their collaborative culture is what helped them reap the benefits. It’s not magic, it’s culture!

-Jim Tarabori, Director, Institute for Supplier Collaboration