Customer Perspective: What Does it Take to Maintain a Great Partnership?
By Ernie Kremling, Vice President of Operations at KMG Chemicals
It takes some serious time and effort to maintain a great, long-lasting partnership, but when that time and effort pays off, there can be extensive benefits for both parties.
For example, chemical customers are very different from other industries – electronic chemical is a highly demanding market, creating parts of chips for laptops, cellphones, iPads, and other technology. It’s important that the manufacturers have materials exactly when they need them, as it’s very expensive to shut down production for even a short amount of time.
Chemical is also very demanding from a customer service standpoint, and after a large acquisition, KMG needed to maintain the standards of a high level of service for the customers while reducing supply chain cost by about 30%. We needed to implement solutions involving carrier capacity in certain difficult markets, carrier management, and even transactional aspects such as freight audit and pay, and Transplace not only provided expertise in these areas, but additional resources that were not available to KMG in-house.
KMG has analyzed and evaluated partnerships with multiple suppliers over the years, and we’ve noticed how important it is to take a look at how the partnership is working overall and determine what level of partnership is desired by both parties. There are multiple levels of partnering that fall in between a simply contractual, arms-length partnership and a joint-venture partnership, and to create a higher level of partnership, the importance of matching up the cultures of the companies is huge.
Always looking toward bettering our partnerships, KMG has expanded continual improvement programs with our suppliers in order to be beneficial to each partnership we have. We’ve done multiple events centered on expanding business processes into our suppliers – for example, we’ve looked at demand planning and order fulfillment processes and married up these processes between two companies.
It takes a lot of upfront time and effort to efficiently manage those processes, including data flow and productivity, between two companies. Sharing strategic plans and perspective with each other in order to be successful together is key. The more you want to partner and combine processes and data, the more upfront time and effort there is – and in order to justify that time and effort, the benefits just have to be there!
What are the most important factors that are an integral part of your partnerships?