Vendors and Clients: Integrating Process Improvement Efforts Across Both Sides of a Strategic Partner Relationship (Part 2)
Posted: 12/09/2009 2:00:00 PM EST | 3
With continued market pressure and the global economic outlook many firms are looking for ways to cut costs and be more efficient. Burnsed and Thornton illustrate this point in their recent Business Week article, “The Six Sigma Black Belts are Back.” Vendors would like to minimize their cost of goods and clients would like to ensure they are getting the best value purchase.
This article focuses on elements of the central repository and toll-gates that need to be put in place between two organizations to allow for successful joint process improvement projects. It discusses an array of factors, such as the need to establish common documentation tools, joint schedules and review process. Both parties need to share a comprehensive approach that encourages shared responsibility and accountability for success.
Establish a Central Repository
Having a central repository to store project-related documents is a major requirement for partnership success. The repository allows both parties access, on a permissioned basis, to needed documents, process improvement project plans, a common work agenda and meeting minutes.
Both companies need to agree on common documents and templates. Some examples may include:
- Project charter
- Roles and responsibilities
- Stakeholder assessment
- Risk assessment (Figure 1)
- Project plan
- Communication plan
- Presentation templates
If parties are using different systems, it is essential that they first decide which tool will be the master repository. Once the decision is made, they can set up the central repository, in which documents can be time stamped, and the correct versions made available. If this step is overlooked, both companies end up duplicating each other’s efforts, and issues with versioning can result. The cost of setting up the central repository needs to be discussed, but this cost may be offset by the reduction in confusion and extra work created by not having one. These repositories are often used at companies for more than just Six Sigma project tracking.
Pre-Planning and Toll-Gates
Many budget-related details pop up as a process improvement project unfolds, but experienced parties can generally identify some of the more common ones during the pre-planning stage. For example, there is a cost burden related to travel for face-to-face meetings, so the steering committee or key stakeholders should discuss sharing this expense by defining when each team will travel. In addition, there should be discussion as to who will pick up the tab for joint dinners, an important social and business activity that will help the teams connect and build loyalty.
During pre-planning, the toll-gate review process needs to be defined and agreed upon by both parties, and issues need to be ironed out, such as will the Master Black Belt (MBB) and Champion have combined review sessions or will each organization approve on a site specific level? The bottom line is that both organizations need to demonstrate progress toward common goals and apply specific tools to guide the team in answering questions as to how to make the process better.
Additional Factors to Consider for Successful Process Improvement Projects
Once the process improvement project is underway, establishing a common repository allows for seamless sharing of information across both organizations. A win-win situation is experienced when both companies enjoy meaningful benefits from the project. When completed in joint collaboration fashion, process improvement savings will strengthen both parties in the strategic partnership relationship.
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Two quick thoughts:
You don't address two of the major issues that can come up when attempting this type of process improvement--
1) When the cost/benefit ratio is seriously skewed one way or the other. What may involve a small effort on one side (along with a large benefit) involves a large effort (and minimal direct benefit) on the other side invariably leads to problems.
2) When the improvement goes beyond the immediate scope of the project (i.e., system improvements that involve resources not originally allocated to the project)--such as--'We'd like for you to start using TQM/ISO 9000, so that we can better track defects to the source' The vendor may be interested in performing this activity, but you'll need the backing of the C-level folks in order to get it done.
Negotiation and long-term committment is key (along with a direct pipeline to the C-level sponsor) to getting these kind of projects approved and implemented. It's also important to be able to accurately and quickly spec the work, so that a project doesn't linger in the 'gee, we'd love to do this, but by the time we get it all figured out and approved, we've missed the next production cycle' circle of hell.
Good topic for discussion--would love to hear more thoughts from folks that have been down this path.
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