As supply chains expand globally, the risk of something going wrong overseas grows exponentially. Natural and man-made disasters, wars and rumors of wars, piracy, counterfeits, infrastructure inadequacies, and labor issues are just some of the ways supply chains can suffer disruptions, and these disruptions come with a cost. According to a recent article in the Gallup Business Journal, 10% of a company's value could be wiped out due to supply chain glitches.
One solution, according to the article's authors (John Fleming, coauthor of Human Sigma: Managing the Employee-Customer Encounter, and Leslie Rowlands, senior managing consultant with Gallup), is to take a supplier engagement approach to risk management, "one that builds on an accurate assessment of the strengths of their supplier relationships." That starts with becoming a customer of choice to your suppliers, a process that involves three key factors:
- Engage your suppliers.
- Let your suppliers into the tent.
- Be easy to do business with.
“[The authors’] research indicates that companies that adopt a proactive approach to measuring and managing the emotional connections that drive supplier engagement can reap substantial economic gains, including higher quality, improved planning, improved product development, greater supplier support and value, and lower costs.”