BEE Partner, South Africa Economy Watch

The problem in most organisations seems to be that value innovation is kept at the corporate level and does not permeate the entire organisation. Employees need to see themselves as a critical resource in the job that they do, not just for the organisation, but also for themselves. Put simply, if an organisation creates an environment in which value innovation is encouraged and rewarded, the participating individual’s self-worth will improve, which in turn will have a positive spin-off on job satisfaction, job involvement, and, ultimately, customer satisfaction and loyalty.

The second level is individualistic in nature. Each employee in the supplying organisation should fully understand how he or she can add value to the job their contact person in the customer company is doing. For example, a business development manager in a deodorant manufacturer will be forever grateful if his packaging supplier can assist in the development of new designs of cans. There may also be certain hot spots that the supplying organisation needs to attend to, and these have to be personalised too.

A good example of this was a problem faced by the aforementioned packaging group with one of its major customers, the South African subsidiary of a Fortune 500-listed company. The customer was complaining about being supplied with defective cans for its aerosol deodorants. This caused two main problems, the first of which was a safety issue. Given that the customer company was holding large stocks of propellant on site, a punctured container could potentially lead to an explosion, which would have had disastrous consequences. The second problem was that, when the customer’s detection equipment picked up the defects, the entire production line had to be shut down for further safety checks. This, of course, could cause serious delays to the production—stock—delivery cycle.

The problem was solved at both levels. Firstly, the company really got to grips with what its customer was trying to achieve in its marketplace. Management did its best to put themselves in their customer’s shoes, and ensured that all of the company employees _wh_o in one way or another touched this customer, did so as well. Secondly, the problem was taken all the way down to the shop floor, where the machine operators were brought into the process. The solution eventually came from a machine operator, who was _rewarded for his efforts. Innovative practices were put into effect, which resulted not only in the problem being resolved, but also in value being added to the customer’s business.

It is worth noting at this juncture that true competitive advantage is created in the mind of the customer, one customer at a time. The reason for this is that, when a customer has purchased a product from a company, he or she has foregone the opportunity to purchase from a competitor, at least for that moment. So, for that particular purchase, the company that has made the sale has the competitive advantage with that customer until the next purchase. When the time for the next purchase comes around, the company will have to ensure that it holds the competitive advantage again. And so on with each purchase.

10. Learn to collaborate with suppliers

Suppliers are experts in their particular industry, yet in many South African companies, suppliers are treated as second-class citizens instead of as a vital part of the entire business process. Because a supplier provides an organisation with a specific product and/or service, that supplier is a valuable contributor to the company’s ability to compete. The example of the aforementioned South African packaging company is a prime example of this. What this means is that the level of service a supplier provides to its customer impacts on the level of service the customer in turn provides to its own customers. It therefore makes sense to harness the expertise that exists within supplier organisations. In doing so, both parties can seek out ways and means to improve the level of service provided by their respective companies. Instead of having suppliers fearful _of losing business unless they ‘toe the line’, companies can get so much more out of their suppliers by treating them as an integral part of their competitive infrastructure.

Supplier involvement needs to cover all major external suppliers, irrespective of the permanency of their relationship with the organisation. The manager will want to develop a proactive supplier bas_ethat understands his company’s values, and shares his commitment to customers, the effective management of the supply chain and the maintenance of a culture of globally competitive service in his organisation. Essentially, the new breed of South African manager will need to get into the habit of moulding their suppliers to commit to a number of vital contributions, such as the following:

• To fully support their company in putting its customers first. They will want suppliers who will work hand in hand with them to fulfil customer expectations.

• To have state-of-the-art skills, expertise and experience in their fields, and to be prepared to develop this throughout the life of their relationship with their organisation. They will want their suppliers to utilise these assets to help the company improve its service levels.

• To provide the organisation with the right quality of service. They will want all their suppliers to commit to maintaining quality service and seek to improve it on an ongoing basis.

• To work in partnership with them to develop the most appropriate relationship. They will want their suppliers to be committed to building working relationships based on trust and openness, and to share and integrate their knowledge with their company to provide customers with the best possible service.

Continuous improvement. The new breed of South African manager will need suppliers who will work and continue to work within a culture of continuous improvement in terms of theirown organisation’s capabilities, as well as in their relationship with other organisations. By ensuring continuous improvement of the relationship, improved supplier input on an ongoing basis is assured.

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