The Challenge
To respect the competitive advantage that our Customer has got from the Strategic Customer Growth Process, Company names have been changed.
The following Case Study involves a leading international packaging company (Supplier) and one of their Customers, a leading manufacturer (the Customer).
The packaging suppliers desire to create strategic Partnerships with those they do business with remains at the foundation of the way they work. This particular journey started ten years ago with a certain level of frustration from both Supplier and their Customer. From the Suppliers angle it was a case of not being able to break through with the Customer, “We are not penetrating, or creating value or growth.”
From the Customer’s angle there were 3 challenges:
- To return to profitability… while facing increased competition
- To reassert innovation as their culture and focus (including technology changes), to ensure they delivered on their Customer needs.
- In their mind, they were not no. 1 for the packaging Supplier anymore… in the words of the Chairman, “We are in a turnaround phase and our most important Partner is not helping us.”
Although the Supplier was focused on this account, they weren’t part of the Customer’s strategic thinking. It was always short-term thinking, short-term results, and delivering… ACTION! And because of this, the relationship had reached a stalemate.
The Supplier turned to their ‘Customer Growth’ Partners, Argil™ and used the Strategic Customer Satisfaction Process (CS) Process™. The intention was to bring about a positive shift in the relationship where both parties gain an appreciation of the influences that could help or hinder an effective Partnership; to gain trust and credibility for both; and to turn crisis into opportunity… and to grow both organisations.
However, this is all a lot easier said than done. Developing meaningful Partnerships takes courage, commitment and time…. and in fact, in this case, seven years to get to, “It’s a Partnership. There is a real interest from our Supplier in our business. It’s an honest relationship. It’s a supportive relationship. We are Partners.
Through a series of in-depth interviews, candid feedback, and joint strategy sessions facilitated by Argil™ the Partnership
went through a number of phases over time. There were critical moments but these can also be viewed
as periods of consolidation… milestones, opportunity, risk.
PHASE ONE: (Year One) In response to the question, Overall, based on the products and services you receive from the Supplier, please rate your overall level of satisfaction? (Where 1 is not at all satisfied and 5 is very satisfied), The Customer’s rating for their Supplier was 2.75 out of 5.00… “Currently we are very concerned… we need to get brilliant at the basics again.”
Reassuringly, the Key Important Action was, Strategic Alignment 40%. “Ninety percent of our business is tied in with our Supplier – our future is in their hands”; “Let’s establish joint goals and strategy together. We need strategic support. How can WE take this business forward?”
The desire was there.
(Year Two to Three) The following years saw resolution of “the basic issues”, a clearing out of those impediments that were holding back the relationship. The top important Action remained Strategic Alignment with thoughts such as, “How will being strategically aligned work for us? Why should we pursue it? Will we get payday? This is where we will test our Partnership and Strategic Alignment”.
PHASE TWO: The second period of consolidation was a time where Innovation was more important than fulfilling supply chain (IFOT) requirements… a paradigm shift for all. This phase took the Partnership from meeting current requirements to a goal of exceeding requirements, a time for growth. The No. 1 Important Action had changed to Innovation 33%. “We need our Supplier to bombard us with products, not just packs. This needs to be finely focused… the Supplier knows us (the Customer).” Coming in at a close second, Strategic Alignment 23%, “The relationship is excellent. All the hard work over the last four years has been worth it! BUT, what will happen in the future?”
The overriding sentiment, “We need a Partnership Strategy to grow the Customer and get penetration into the market. We are totally committed to the Supplier and to being a business partner with you” and the Strategy session theme, “WE… Driving Growth Together.”
A second period of consolidation came at Year Five and this was the first time the Supplier was seriously rated against a competitor, “Get the spark back into the relationship – we want it back. The competitor is not as good as our current Supplier, but they have got the spark” and, “There have been big changes in the Customer. First two years – ‘fix’; next two years – ‘innovate’; now ‘acquire… and grow’.”
PHASE THREE: The end result, the Overall Satisfaction Rating had moved to from 2.75 to 4.13, and a Partnership robust enough to handle almost anything, “The internal issues are sorted out between us, i.e. relationship and problems are resolved… and margins and value are continually worked on together; we have created wealth and value over time”; with a Joint Vision, To be Strategically Aligned with each other, where there is a strong Partnership and both parties are striving for and achieving mutual growth and success… now and in the future.
After all was said and done between Suplier and the Customer, the Manufacturing Manager (at the Customer) had this to say of the Process, “Value is an ongoing Process – dealing with new issues every year. If you don’t go through the Process with your Key Customers, you won’t see the cannon ball before it blows your head off.”
Now there is no turning back, working together, strategically thinking together – now both Supplier & the Customer Management can see the growth. A credible, honest result.