highly respected school of thought teaches that everyone in the supply chain, from the harvester of raw materials to the ultimate consumer, is inexorably linked in an unbroken continuum of mutual dependence and rivalry. If this is true, it means everyone involved in the process is in competition to secure the largest possible piece from a single, fixed-size pie.
A highly respected school of thought teaches that everyone in the supply chain, from the harvester of raw materials to the ultimate consumer, is inexorably linked in an unbroken continuum of mutual dependence and rivalry. If this is true, it means everyone involved in the process is in competition to secure the largest possible piece from a single, fixed-size pie.
So, whenever one participant in this process increases its share, it automatically diminishes someone else's. Yet, parties to today's business transactions insist on telling each other they want to be partners and establish win-win relationships.
So are they saying they are willing to sacrifice their margin to improve the margins of their partners? The honest answer to this question is: No. The opposite answer would be a sign of weakness, and in the competitive world of the global economy, even the slightest flaw in one's business practices is quickly uncovered, exploited and capitalized upon.
Perhaps it would be more productive and profitable simply to acknowledge the competitive nature of the electronics industry supply chain. We can start by recognizing one another's perspective.
As a starting point, can we admit to our desire to win without pretense, shame or reservations? Let's just admit that it is our job to win. We like to win at everything we do-sports, games, business, life.
Further, let's admit that in business you rarely have a true win-win: By definition, if one party "wins," the other party's interests must have taken second place to the winner's, and thus the other party did not win.
Is the company with the second-largest market share winning? Does management ever accept second place as being good enough, or does it challenge its team to work harder to win the coveted first-place position?
Finally, we need to recognize that winning isn't an end point but a process. While the old adage "It isn't whether you win or lose but how you play the game" may not perfectly describe what we are trying to uncover, it does help us understand the value of trying to win. Yes, you are going to try to win-and you should, since it will make you stronger and more competitive. If you do not win today, you may win tomorrow. It is your obligation, your task and your responsibility to try to win.
Of course, there are circumstances where true win-win situations exist and situations when winning as an individual is destructive to the partnership. An example is the domestic partnership. Here, the success of the union through self-sacrifice for mutual gain is-or at least is supposed to be-the normal course of events. But can you or should you extend these unique social practices into your businesses? Should you treat a customer or supplier as you would a spouse?
Certainly, you owe a lot to your business associates both up and down the supply chain, since no one stands alone in this process and all benefit from whatever sliver of the pie they manage to secure.
But you should never forget that suppliers are not your "partners." They are independent for-profit enterprises; and while they need to be responsive to earn your business, they are not responsible for your financial success. They are responsible only to their shareholders and stakeholders, not yours!
Charlie Barnhart can be reached at email@example.com.