The automobile companies were among the first American corporations to grasp the notion that a partnership with facility vendors was progressive and not regressive.
In an era where the auto companies are looking for ways to increase productivity while increasing their ability to relate better to vendors who were receiving more than 60 percent of the corporate revenue, some within the industry realized that a good relationship was better than a bad relationship in any situation.
This realization didn’t come easy and it didn’t cascade throughout any organization easily. Some within the automobile corporations and their vendors were beginning to realize that partnering on any project was going to get both parties farther down the roads to success.
In the beginning it was just ideas about how to transport parts more efficiently. The suppliers said if the plant can get a schedule of when part shipments are required they can make sure that the parts are there without guess work. A group was organized to work with suppliers to understand how best to communicate this information. The first six months showed a dramatic improvement in on-time part deliveries.
Building on this experience the auto companies began to expand the idea of partnership with vendors in other areas. In addition to the standard purchase agreement a supplemental memorandum of agreement was signed by both the corporation and the vendor which outlined what was expected of whom and when. There is something about a detailed agreement in writing that means so much more. Either party can refer to it.
An example is when a large manufacturing facility needed an interior painting and an exterior painting also. The painting company was selected from among a number of painting contractors by a plant committee operating under the Managers. This committee was established to interview and recommend a company to the Facility Managers.
Once the company was approved and the purchase contract was ready to be signed the Plant Manager asked the company executives and his senior staff to attend a meeting and identify what each side needed to have happen to get the job done. It was a “to do” list or a “wish list” comprised of things that no one would have thought of without a “lay it all on the table” session, sometimes called a brainstorming session.
Each side took one week to review the list and meet again to sort out what each could agree to. A final list was developed and signed. The painting was finished two weeks ahead of schedule and $75,000 under budget.
The auto plant manager was trained to build relationships through several methods. One was openness and honesty, another was understanding and respecting the vendor’s work style and needs, and another was respecting personality differences. The plant manager knew that painters were different than auto workers so he had to find areas of common interest. A softball game was the answer with a hot dog roast following. The painters won. More importantly, the plant manager made it clear that he had the painting company’s best interest in mind and that meant that he wanted them to be compensated adequately for their work. Utmost in his mind was treating their workers with the greatest of respect.
The cooperation displayed by the plant in making sure that the painters had the access they had requested in their wish list made the job so much easier to complete. The painters finishing with an area according to the plant’s time table enabled the plant to run smoothly.
Facility managers have a road map to improving vendor performance in the example provided here.