THE IMPACT OF WORLD-CLASS MANUFACTURING PRACTICES ON SMALL MANUFACTURERS - by
David K. Johnson

Coordination and Communication

Most of the benefits of supply-chain integration are a result of coordination between supply-chain members. Coordination requires communication and visibility through the entire supply-chain. Each supply-chain member must understand what the others are doing and coordinate their efforts to optimize the performance of the entire system (this is much more difficult than it sounds). Establishing coordination through the supply-chain reduces the bullwhip effect and promotes synergies as supply-chain members work together for a common goal.

Trust

The type of relationships required for supply-chain integration exposes those in the supply-chain to the risk of being taken advantage of by others in the supply-chain. Because of this, picking the right partners and developing trust becomes extremely important. Research conducted by professor Stanley E. Fawcett at Brigham Young University has identified five basic elements of trust:

• Trust is demonstrated by behavior
• Trust requires open, honest communication
• Trust requires that you do what you say you are going to do the first time, every time, all the time
• Trust requires personal interaction

Without each of these elements, trust does not exist and without trust true supply-chain integration does not exist.

Back | Next

Copyright © 2005. David K. Johnson. All Rights Reserved.