Dick Hill, of ARC Advisory Group, led a panel discussion this morning on Collaboration. You can see the abstract in a previous blog entry this morning.
This panel discussion was so good I skipped the 11:00 session on wireless I had said I wanted to attend. Sorry about that if you were waiting with bated breath to hear what I think about wireless once again.
The panel consisted of Tom Alloway, process control coordinator for Nova Chemicals, Wilbert Long, vp commodity management for Alcoa, Rory Johnson, director of design and process engineering for Weyerhauser, Larry Jackson, vice president of strategy and sourcing for Fluor, and Jerry Gipson (frequent Control contributor and director of engineering solutions technology center for The Dow Chemical Company.
Dick Hill rustled up a couple of really good quotes to start things off. He quoted famed 20th century radio personality Fred Allen as saying, “It is probably not love that makes the world go around, but rather those mutually supportive alliances through which partners recognize their dependence on each other for the achievement of shared and private goals.” And he followed up with W. Edward Deming’s famous, “It is not necessary to change. Survival is not mandatory.”
It was clear from the start that the panel was very much in favor of collaboration…and they said so at length.
“True collaboration is focused on results,” Jerry Gipson said, as he went through the three buckets he divides collaboration into: setting the stage, planning and execution. “You have to focus on the people,” he said, “and have a continuing focus on the management of collaboration to make it work.”
“You have to create exitement,” said Fluor’s Larry Jackson, “and a corporate culture around willingness to collaborate. The key is people. You need to have a sales and implementation strategy to get your message across internally, you have to have a plan for managing through adversity because there always is adversity, and you have to show that this collaboration creates sustainable value.”
Weyerhauser’s Johnson agreed. “Collaboration for me,” he said, “equals cooperation in working toward a common goal. We were collaborating before collaboration was cool,” he quipped. “For us, collaboration starts before the project is approved.”
“We are a standards focused company,” Johnson continued, “and we try to keep that focus throughout a collaboration.”
The way to a successful collaboration is to establish and then maintain ties with all the collaborators, he concluded.
Alcoa’s Wilbert Long noted that strategic partnering relationships are often misunderstood. It is Alcoa’s intent to bring suppliers in early in the process. They have, he noted, a seven step collaboration creation process that includes supplier relationship management and cross functional collaboration teams within Alcoa.
Tom Alloway from Nova Chemicals noted that it is the relationships between suppliers and end users that can make collaboration work, even under stressful conditions.
Fluor’s Jackson agreed. “We did a project, and there was plenty of blame to go around. We were to blame, the customer was to blame and ABB had its own share of blame coming. But we were able to sit down and calmly discuss the problems with ABB and they came to the plate and solved the problem. Instead of nearly ending our relationship, it strengthened it, because now we know what they will do in a crisis.”
One of the interesting things that was discussed was the lack of transparency that most end user companies have toward suppliers, and potential suppliers.
Rory Johnson, from Weyerhauser, put it well. “Everybody wants to ‘partner’ with you. Of course when you get down to it, that means they want to sell you stuff.”
It was clear that even these companies, heavily into collaboration, really do not have a functioning and integral way of soliciting new suppliers, or explaining what their needs are.
Wouldn’t it be nice if you went to a company website and they had a section that said: “This is what we’re looking for. If you can help us, click here.”
Most end users do not understand that efficiency in the selling process directly translates to lower prices. Why? “Cost of sales” is generally a larger component of cost than manufacturing cost, even fully burdened cost, is. If suppliers and end users collaborated to reduce the cost of sales, it would be possible to reduce prices while keeping profits at the same level. What a concept!