Editorial opinion: Integrating with suppliers

As a late April snow dump of 20 cm turns Newfoundland white, fields in Ontario are greening nicely and blossom fragrances fill the air in sunny southern B.C. It should come as little surprise that a recent poll of Canadian businesses discloses as dramatic a variance in responses to the current economic climate.

A survey of 31 large Canadian firms by Forrester Research released in April reveals that the same proportion (10 per cent) of Canadian IT decision-makers see 2004 as an extremely challenging year as do those who see it as a very good year. The majority (42 per cent) rank it as a somewhat challenging year. In comparing their IT budget this year to last year’s, 32 per cent indicated they plan to increase it, 45 per cent plan to keep it the same and 13 per cent plan to lower it.

Does the fact that Canada is a country of diversity at many levels give us an advantage in the multi-national business arena? We have been accustomed so long to having the advantage of a weaker dollar that losing that edge could blind us to our other strengths. Even admitting this is unrestrained generalizing, I would argue that we tend to recognize others’ differences better than some countries where something as basic as a nation-wide weather report indicates a much more homogenous world. One would hope that such recognition of differences leads to tolerance and, ideally, even acceptance. If that is the case, would it not follow that we will be the best at working more co-operatively with business partners and creating mutually beneficial supplier/vendor networks?

Manufacturers, wholesalers and retailers are being challenged by increasingly global markets to do just that. Global standards such as that imposed by the Sunrise 2005 deadline are testimony to the need to compromise and adapt for the sake of time and cost savings.

Jim Kilpatrick, a principal with Deloitte in Toronto, tells me that trading partner integration is a very key focus of manufacturing companies who have worked the last decade at re-engineering to break down internal functional barriers to make their own operations efficient. Many companies have tackled such issues as the disconnect in processes between, for example, operations and the sales and marketing group, he says.

“I wouldn’t say they are all completed or have got to where they need to be, but now the challenge is integrating between companies.”

He charts the progress on that score, from public exchanges to private exchanges that tried to replace EDI with more efficient means of communication to suppliers.

Kilpatrick says trust is the key challenge when integrating with suppliers. “When you have different shareholders ultimately, people are leery of the win/win equation. Understanding what benefits exist between the two trading partners, how to streamline the operations so the benefits that exist materialize and then figure out how to share those benefits is a tricky challenge.”

And that just may be an area where many Canadians will excel.

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