Quelle: CIO USA
Thomas Fisher is getting ready to peel back the covers on hiscompany's confidential information so that suppliers can better servehis needs. But before he takes that big step toward collaboration,he's got to take a deep breath.
"There's some leeriness on our side. Suppliers will need to have a lotof our proprietary information to fulfill our raw materials needs inreal-time. That could be used against us if we're not careful," saysFisher, vice president of global information technology for Applica,an $850 million maker of small appliances (including the Black &Decker line) headquartered in Miami Lakes, Fla.
In June, Fisher is planning to launch a Web-based front end to hismanufacturing system, based on QAD's MFG/PRO, that will give suppliersunprecedented access to Applica's production data. Sharing theinformation will allow Applica to do real-time procurement of rawmaterials it uses, which Fisher expects to lower costs and increaseproduction flexibility. But with that big win comes the risk that theinformation will be misused - for example, specifics on Applica'smanufacturing processes or product design might somehow make their wayto competitors. "We're working on rules and procedures on how thatinformation should and should not be used," Fisher says.
His sense of unease is pretty universal. Seventy-five percent ofsenior IT managers cited lack of trust as the number-one barrier toelectronic collaboration in a recent survey conducted by NerveWire, aconsultancy in Newton, Mass. "It is a tradition that we don't trustour business partners," says Hau Lee, professor of operations,information and technology in the Graduate School of Business atStanford University and an authority on supply chain management."People don't have a clear understanding of how sharing informationwould result in better performance. The lack of understanding inducesfear and skepticism: 'I'm not sure, so it's better not to doit."
Yet the potential benefits of collaboration are huge, be itintegrating supply chains, product development or even businessprocesses. Companies - and their supply chains - can cut out waste, speedtime to market and be more responsive to customers' needs by sharinginformation. During an otherwise grim year in 2001, for example,Applica cut $60 million out of its average inventory and trimmed thenumber of days product remained in inventory from 136 to 94, thanks tocollaboration projects already in place, Fisher says.
Sooner or later, companies in all industries must face the fact thatcompetition is increasingly between supply chains rather than betweencompanies. Hardly any big-name manufacturers actually make anythingthemselves anymore - they leave it to contract manufacturers so that theycan compete on the basis of superior information and efficiency. "Allcompanies will have to do collaboration as a core competency, or theywill not survive," asserts Denis Mathias, a partner in San Jose,Calif.-based IBM Consulting Services. Supply chain partners "need tohave a different value proposition not based on exploitation butwin-win."
Spalding Holding, a maker of sporting equipment in Chicopee, Mass.,finds its collaboration with Wal-Mart Stores to be a win-win, saysSpalding CIO Christine Rousseau. "Getting their forecast and[point-of-sale] data is beneficial to us because it allows us to keepour inventory levels down. It lets us serve [Wal-Mart's] needsbetter," she says. Wal-Mart, in turn, runs short of Spalding goodsless frequently than it did before the companies exchanged data andhas a better understanding of Spalding's capacity and costs.
In contrast, companies that screw their trading partners to theproverbial wall will find they cannot work as effectively, saysMathias, as those that collaborate seamlessly in an electronicenvironment designed to help all parties thrive. The age ofspecialization demands that companies lay down their age-oldadversarial relationships with trading partners.
Of course, company practices won't change overnight. And neither willhuman nature. Fear, uncertainty and doubt (FUD) has always drivenpeople to hold information close to the vest, even among coworkers. Atthis early stage of collaboration, companies are struggling to findways to safely open up. Unless and until partners can see that it isin their own best interest to collaborate, getting them to trust eachother will be an uphill battle. Just ask Jack Lowry.
FUD Factor
Back when he was vice president of information technology atnow-defunct Goldman Industrial Group of Vermont, anautomotive capital equipment provider in Springfield, Lowryhad a vision nearly a decade ago of how electroniccollaboration would help his company and his customers workbetter together, cutting cost, improving quality, increasingresponsiveness and improving time to market. Back then, thetechnology piece was missing from the collaborationpuzzle. But Lowry was convinced collaboration was sosensible that anyone could see the payoffs.
And perhaps Goldman's customers and suppliers could see potentialbenefits, but long-standing mistrust - both inside and outside the wallsof the enterprise - proved insurmountable. Before bringing his message ofcollaboration to outside partners, Lowry had to start within theorganization. There he found enough skepticism to sink the wholeendeavor.
"The reaction was, What's in it for me? Why should I do this? It'smore work for us," says Lowry, who last fall cofounded Global LocationServices, a provider of global positioning systems in Williamstown,N.J. With an extensive background in both manufacturing and IT, plus aboatload of charisma, he managed at last to convince people internallyon the Vermont sales team that collaborating externally was the rightthing to do. Then he had to wait for his salespeople to provide himthe right contacts at their customer companies. Then he had to get thesales guys up to speed on collaboration - at least enough to soundmarginally knowledgeable on the subject when meeting with outsideparties alongside Lowry.
When Goldman reps finally met with their partners and customers, itwas more of the same. "You'd need someone from the other side's ITdepartment, the head person in charge of the plant, your sales guy andyour plant guy," says Lowry. When at last all the right people werearound the table, good feelings did not exactly flow. "The arms arefolded. They're shaking their heads. They're looking tired. They wantto know, Do you really want to collaborate, or do you just want us todo something for you?" he says.
Sometimes the other side would flat out refuse to get involved. Moreoften - and worse, by Lowry's lights - the partner would agree tocollaborate but then not do anything. "They'd drag their feet. Theywould wait it out because they knew there would be a change inmanagement, and it would someday go away," he says. Just months beforeGoldman filed for bankruptcy in February 2002, Lowry finally found apartner willing to go beyond the pilot stage on a far-reachingcollaboration project in which the companies agreed to directly linktheir manufacturing systems. But before the venture could get going,the recession caught up with Goldman. You can't help but wonder ifLowry had had more success earlier whether the company would be aroundtoday.
Lowry was a visionary. He had much more than minimal collaboration inmind and only early stage technology to pull it off. In fact, he wasattempting the deepest degree of collaboration, in which the majorityof interactions between partners involve shared applications. Thepromise of such integration is that partners redesign their businessprocesses so that activities naturally shift to the appropriate party,eliminating much waste. Today, there are many technology solutions onthe market or on the way (such as Web services) that can helpcompanies achieve this. It's the people issues that stillloom large.
Scott Griffin, vice president and CIO at Boeing, is running up againstthe trust barrier. Boeing engineers have long shared product designdata electronically with their supply chain partners. At that basiclevel of collaboration, trust has not been a big issue because thearrangement is covered by standard nondisclosure agreements. But ahigher level of collaboration, in which the company will integrate itsbusiness processes with its partners, holds both the promise of fatterprofits and the peril of greater risks, Griffin says.
In the near future, Boeing engineers and their partners won't justpass design documents back and forth but will actually share the sameproduct data management system with their partners, as if there wereno corporate boundaries. "In this high-level collaboration we willhave designers [from all sides] working concurrently. Someone isbuilding the components; someone is designing the assembly; someone isfiguring out how to make the assembly; someone is figuring out how theassemblies will go together into subassemblies and then finally intoan airplane. That is nirvana as far as collaboration," says Griffin,speaking from Boeing's new headquarters in Chicago.
Even at such an advanced level of collaboration, technology is nolonger a barrier. "The technology is getting to the point where youcan literally work together as if you were in the same company. Theonly rules are nontechnical rules about who gets to work together, howdo they work together, what information can they share, whatinformation can't they share, who owns the intellectual property,"Griffin says.
But "this is a big deal in terms of trust because the [supplier] couldbuild the same part for your competitor," he says. "Once you say,Build me the world's best overhead arch beam, they could turn aroundand sell that to Airbus." No one has come up with a satisfactorysolution to that conundrum yet, despite vendor claims to the contrary,says Griffin, adding, "We need to work some stuff out."
Six Ways of Getting to Yes
So successful collaboration boils down to trust among partners. Andtrust has to be built up over time. "You have to earn it," saysApplica's Fisher. "You can't walk in the door with bright eyes andbright ideals. It takes time." Acknowledging that there are no quickfixes, here are six ways CIOs can lay the foundation fortrust.
1 Start small. Begin by collaborating on asmall scale - such assynchronizing one type of sales data - and with a partner you alreadytrust (hopefully, the feeling is mutual). Pick a project that islikely to provide a quick return on investment for both sides. Onceyou show real benefits and create a climate of trust, then it's timeto go for bolder stuff. Spalding, the sporting goods manufacturer,launched its collaboration with Wal-Mart by initially exchanging datavia EDI. Today, the companies share forecasts and real-time sales dataover the Internet. The key to the successful venture, says SpaldingCIO Rousseau, was establishing a track record of collaboration,however modest.
2 Look inward. As Lowry found at Goldman Industrial Group, thenecessary precondition for establishing trust with outside partners isestablishing trust with one's internal peers. That means the CIO andhis staff must make peace with the supply chain folks, the e-commerceteam, the marketing and sales force, and whomever else might beinvolved (which is to say, everyone). Give the same pitch you would toexternal partners, singing the commonsense benefits of workingtogether and grinding along toward consensus. Your internal politicalsituation might be a mess, but that's no excuse. If you can't breakdown barriers with the people you play alongside on the companysoftball team, you don't have a hope in hell of doing it withoutsiders.
3 Gather 'round. This is no time to use e-mail or videoconferencing.There's no more sophisticated method to build up trust than to meetwith people the old-fashioned way, around a table. Listen to theobjections, find out what the agendas are, buy them lunch (better yet,cocktails), and then do it all over again as people leave andmanagement changes. Boston-based Partners HealthCare System recentlybegan sharing some data with Blue Cross Blue Shield of Massachusetts,a health insurer. The undertaking makes sense for both sides, butfirst the parties had to overcome antagonism caused by fractiousnegotiations on reimbursement rates that happen every few years. JohnGlaser, vice president of IT and CIO for Partners, and hiscounterpart, Blue Cross CIO Carl Ascenzo, discovered that a smallhumanizing touch is sometimes all that's necessary to getcollaboration working. The person who does claims processing atPartners got together with her counterpart at Blue Cross for the firsttime. "The social glue didn't exist because they had never met. Onepart of collaborating is getting to the point where you realize youlike the other person," says Glaser.
4 Go for the win-win. It's a cliché, but beprepared to hear - andsay - "win-win" (or even "win-win-win") over and over again. That'sbecause collaboration really is a new way of doing business, a systemin which the biggest parties do not bully and abuse their partnersbecause they can, but rather help create an environment that optimizesbusiness for all supply chain members. If you can't demonstrate thatthe collaboration initiative will benefit everyone, no one is going toget behind it - in their hearts, minds or wallets.
5 Don't give away the store. Declare that no one has to, or should,share all information. Even in this day of the extended enterprise,some information should remain proprietary. Acknowledge that pointright away so that people can relax. You don't have to shareeverything to improve your supply chain's performance. Simple exchangeof demand, consumption and capacity forecasts can go a long way.
6 Just do it. One of the best ways to build trust is simply to startsharing information. If all goes well, success breeds trust,emboldening the partners to go on to bigger things. Rousseau doesn'tworry that sharing data will lead Wal-Mart and other customers such asKmart to try to drum down Spalding's costs. "That will happen anyway.We're not afraid of that. We just have the kind of relationship whereit's beneficial to both sides to share as much information as we can,"she says.
Having a history of successes together goes a long way to maintainingtrust, Rousseau says. "Nothing bad has ever happened with theinformation they send to us. And vice versa. Trust evolves throughreliability and being able to have accurate, timely data."