Beyond the Research Part Two: Green, Lean and Global Supply Chain Strategies
Last week I shared with you the first installment of an interview I conducted with Dr. Diane Mollenkopf and Dr. Wendy Tate, from the University of Tennessee. In this second installment, Diane and Wendy share their thoughts on collaboration and relationships throughout the supply chain.
Interview With the Authors
Question 2: As it relates to “Green, Lean and Global Supply Chain Strategies” how important did you deem the aspect of “Collaboration and Relationships” throughout the supply chain?
Diane Mollenkopf: Collaboration and relationships are very important throughout the supply chain. Lean policies have historically been factory-level or firm-level concepts. Many participants spoke about their efforts to extend lean practices across their supply chain—most were focused on upstream supply relationships. Being leaner across multiple firms requires a much higher level of coordination, and thus more integrated relationships. This seems to be a challenging, yet important frontier for many companies that participated in the research. It becomes particularly challenging when suppliers are overseas, but definitely seems to be an area of increasing importance for many companies.
Wendy Tate: As the organizations started to realize that being lean is both an intra- and an inter-organizational concept they learned that they needed to look outside of their own facilities and work with both suppliers and customers. There are many inter-organizational “lean” decisions that must be made, especially related to inventory and the transportation of that inventory. It is becoming more common to have suppliers located at the manufacturing site in order to optimize or minimize waste. This type of business relationship involves a significant amount of trust and collaboration.
Diane Mollenkopf: On the green front, many participants are responding to customer demands for greener products and greener processes. This requires a higher level of collaboration to ensure that customers understand the green attributes and related value outcomes as suppliers initiate greener practices. It also requires management of tradeoffs because customers can’t always get the green attributes at an acceptable price point (due to technological constraints, for example), thus collaboration is needed to determine the acceptable solutions. The discussions highlighted very clearly that the drive towards greener products and processes is very much a journey that customers and their suppliers must travel together. This suggests high levels of collaboration and strong relationships with key supply chain partners will be necessary.
Wendy Tate: An interesting insight for me was the number of suppliers that are initiating green projects or innovating in the environmental area. Some of the push to be more environmentally sustainable is actually being driven by suppliers that are beginning to use green initiatives as a differentiator. By focusing on green as a core competency or innovating in the environmental arena, these suppliers are strengthening the relationship with the buying organization. As purchase orders change from being green as a suggestion or qualifier, to being green as a mandate or order winner for the suppliers, those poised and proactively pursuing excellence in this area will achieve greater success.
About the Authors:
Dr. Diane Mollenkopf is an Associate Professor in the Department of Marketing and Logistics at the University of Tennessee, Knoxville. Dr. Wendy L. Tate is an Assistant Professor in the Department of Marketing and Logistics at the University of Tennessee, Knoxville.
By the way, if you want to download and read the entire 53-page study, use this link.
What are your thoughts on these responses? Do you have any collaboration success stories you can share with our readers?
In tomorrow’s installment we will hear about how participants viewed the intersection of green and lean in their organizations.