S upply chains are more than just faceless corporations and transactional ows. The people in supply chain organizations have agency to direct and modulate those ows. When it comes to making decisions in a supply chain, such as managing exceptions or escalating problems, the personal relationships between the people in the companies and both their customers and suppliers matter. As Lynn Torrel, chief procurement and supply chain of cer at Flex, explained about the company’s operations during the pandemic, “We’ve had a few escalation calls with suppliers, and there are critical needs. Often, it’s someone I’ve known for many years. We had a hard negotiation and then had dinner and spent time together, and we always see each other at different events. That personal side is important, especially the relationships and trust that build over time.” Person-to-person communications help provide unstructured information about what is happening and what each side is considering doing. It helps in negotiating a solution and obtaining mutual commitments to action. “You can be as technically savvy as you want,” Torrel said, “but at the end of the day, you’ve got to pick up the phone and see if you can get a solution.” COMPLEX RELATIONSHIPS Customer-supplier relationships in supply chains can be quite complex. Large organizations can have a web of personal relationships at supplier and customer organizations that span many levels or functions in each other’s enterprises. Operational and administrative personnel might interact frequently to solve problems with purchase orders, shipments, and payments. Engineers in both organizations interact when working on new products and implementation of new technologies. Managers and executives hold strategic discussions and negotiations. Companies often maintain teams dedicated to speci c high-pro le customers, creating long-term, person-to-person relationships. Good person-to-person relationships create a social bond that modulates how companies treat each other. To this end, Procter & Gamble, for example, has an of ce in Bentonville, Arkansas, next to Walmart’s of ces. It is staffed with several hundred people, all dedicated to the P&G/Walmart relationship. There are so many vendors with similar of ces around Walmart that the area has been dubbed “Vendorville.”
July 2023 • Inbound Logistics 181
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