Jason Busch recently posted a note worthy piece on collaboration (Supplier Collaboration – How Sweet It Is) where he recounted how Hershey Foods and Kmart had developed and executed very successful programs for the Kmart chain.
I was further reminded on how these types of relationships work at lunch yesterday when I ran into an old friend and he mentioned that he was waiting for the response from one of his customers to whom he had delivered material earlier that week. My friend is a songwriter and he’s is contracted as a supplier to one of the major record labels. It’s a buyer/supplier relationship built purely on trust (and past performance).
Now I understand that this might seem a bit farfetched for some, but remember that the recording industry is an 18 billion dollar industry that has experienced a nearly 15% drop in sales annually over the past few years. It’s a business that more and more has become dependent on external suppliers to deliver songs, the changes to the industry that were caused by The Beatles in the sixties have become obsolete and they are more and more resembling the industry demography of the fifties with freelancing songwriters providing songs to labels. But in order for this to work:
- The buyer needs to trust the songwriter to be able to deliver what they (and their artists) need in order to become more successful.
- The suppliers need to build a relationship that enabled them to deeply understand what both the record label and the artist was looking for. And unless this is delivered, there is no money coming in. So the depth of the relationship and common understanding is essential.
Now this type of supplier relationship might only be fruitful for a few select categories, but I believe that if we are to be able to exploit the potential for innovation in the supply chain – relationships like this will surely be integral in attaining that goal.
As for my friend in the example mentioned above, I don’t know the outcome yet, but if my friend has understood exactly what the stakeholders were looking for his material will end up on the next Kylie Minogue album.
