The term “Partner Intimacy”, when it comes to the profession of Logistics, is a very specific and “strictly business” term. Intimacy is one of the critical factors in successful logistics partnering. In other words, it means the working relationship between partners in a process, and the degree to which they share every nuance of the process in order to increase success, efficiency, and profits for everyone in the supply chain. All logistics professionals know that any supply and logistics delivery system is made of many autonomously functioning entities who have agreed to cooperate (partner) in order to streamline a particular pathway of commerce. Simply put, the “intimacy” in that relationship comes from the working relationship between all of the partners. Because effective partners share confidential corporate information, trust between them is critical. Intimacy means eliminating surprises by sharing detailed daily information. For example, a tier one supplier to the automotive industry needs to know how many autos are produced daily, any planned changes in those production numbers, and the current number of days of finished goods that are already in inventory. This confidential information shows the supplier what to plan for in near term demand and facilitates better service to the customer’s plant with the magic of the JIT supply chain. Intimacy is the process of sharing the correct forms of this type of information in a continuous and accurate manner. This information can include sales data, POS data, order change notices such as additional orders or cancellations; global inventory management, both quantity and location; and global sourcing opportunities so that supply chain members can improve purchase leveraging and component standardization. The benefits of this level of information sharing can be significant and measurable. For example, when Osram GmbH bought GTE’s Sylvania lighting division, it initiated a detailed supply chain integration program. Within six months, fill rates were at 95% and climbing; individual SKU’s forecast had improved by 16%; obsolete inventory was down 10%; and the company had saved more than $300,000 in transportation costs. All of this happened within six months. This concept of intimacy works. It needs to be accurate, controlled, and proactive. Once a well designed system is actively in place, all of the following benefits will begin to surface. Each partner in the process will:
- Embrace a long-term orientation toward the process.
- Work in ways that are strategic in nature.
- Share information proactively and willingly.
- Share risks and opportunities for the greater success.
- Engage in and portray a common vision.
- Share short-term and long-term business plans
- Become centrally driven by end-customer expectations.
Will the new intimacy process show immediate results? Well Osram’s took only six months! Will it be worth the effort to your logistics process? Without question. There are endless large and small success stories out there to study and learn from. It’s time for your team to become one of them.
You can do this!
By K.B. Elliott
K. B. Elliott is a freelance writer for LogisticsJobSite.com. Working various logistical positions in the Detroit area for over 30 years gives him a unique perspective on the process. More of his blogs are at LogisticsJobSiteblog.com, and be sure to check out the postings for jobs in nearly any industry at Nexxt.