Highly Effective Supply Chains

We interviewed Prof. Richard Wilding on setting up partnerships as a key factor in effective supply chain management.

Professor Wilding, a key factor for effective supply chain management is building relationships. What essential aspects have to be borne in mind here?

Richard Wilding: There are three essential dimensions: time, transparency, and trust. Each is interrelated and dependent on the other. Understanding the time dimension of the supply chain enables organisations to see clearly what is happening within the supply chain system. When everyone knows what is going to happen and confidence is built because of transparency, trust develops between all the players in the supply chain. This, in turn, results in greater understanding of the time dimension, and, hence, greater levels of transparency and higher levels of trust.

Why is trust so important – and how do you identify trust in the supply chain?

Richard Wilding: Trust is required in order for the overall supply chain to evolve. The simple evolutionary process that takes place is as follows. Firstly, the parties need to “co-operate” on issues. They then move to “co-ordination,” where they may work independently but co-ordinate activities. Finally, they move to full “collaboration,” where both parties work together on both the tactical and strategic level. This behaviour (cooperative, coordinative, and collaborative) drives trust in the supply chain and leads to a so-called collaborative spiral of success.

Could you give us an understanding of the spiral of success?

Richard Wilding: The collaborative spiral of success is characterised by a win-win situation in which each side is delighted to be involved. This leads to a reliable relationship, which concentrates on service and product delivery as well as lowering joint costs and risks – which again builds up trust. Usually, creativity and stability in the relationship evolve, and partners innovate and synchronise their objectives. This leads to more frequent and more open dialogue, exchange of information and the business relationship becomes a much better one.

Leading companies in the area of supply chain management already integrate their own processes and expertise efficiently with those of their partner companies. Transparent, collaborative approaches are seen here not as a danger, but as an opportunity to generate added value.

A new report approves this. Read more!

Richard Wilding
As Chair (Full Professor) at the Centre for Logistics & Supply Chain Management and Director of the supply chain risk forum at the Cranfield School of Management U.K., Richard Wilding works with European and international companies on logistics and supply chain projects in all sectors.