Why is managing vendor relationships so difficult?
I first heard the term Keiretsu in the mid-90’s with eyes fixed on Japan’s mastery of process efficiency and productivity within complex organizations. The ERP world was buzzing, and our CEO at the time was delighted in applying the theories of Keiretsu to our company and its diverse ecosystem of solution partners. The very sound of the word still conjures for me a picture of an inherently successful, harmonious and Zen-like network of symbiotic business relationships.
Having just stumbled across the word again 15 years later, I’ve learned there are two types of keiretsu: vertical and horizontal. Vertical keiretsu illustrates the organization and relationships within a company (for example all factors of production of a certain product will be connected), while a horizontal keiretsu shows relationships between entities and industries, normally centered on a bank or trading company. Both are complexly woven together and self-sustain each other. A very good thing...exactly like it sounds.
But the truth is that global service and supply chains are far from optimal. With an appetite for greater agility and financial performance, today’s Telecom executives need help optimizing processes to drive profit from managed services. Without shared supply chain visibility into the flow of network assets in reverse logistics, the integration points between manufacturers, outsourcing partners and the end customers are very hard to connect, and efficiency is dubious at best.
Vendor Management Best Practices On the Horizon
What’s needed is a collaborative view that bridges the information gaps, bringing together internal and external asset inventory data to make it easily available to buyers, planners and others. (Some will tell us that their ERP system handles this, yet they continue to lose tens of millions each year to service chain inefficiency, inability to extend product lifecycles or recover full market value for unused assets.)