Vendor and Clients: Integrating Process Improvement Efforts across Both Sides of a Strategic Partner Relationship (Part 1)
Suppliers are searching for better ways to please their customers, and clients are looking to ensure they are getting the best value from their suppliers’ products and services. This is the classic win-win scenario, but traditionally, a company’s process improvement projects start out by understanding and improving processes under its own roof. To enable integrated approaches to successful joint process improvement initiatives, moving away from one-sided tactical transactions and edging toward strategic partner relationships is key.
This article focuses on elements of the overarching structure or agreement between two organizations most likely to result in a successful joint process improvement project. It discusses an array of factors, such as the need to establish a strong leadership team, and the importance of creating and following common terminology and methodology. A more complete list of essential elements includes:
- Steering Committee
- Budget and funding
- Confidential agreements to talk openly
Taking this comprehensive approach encourages both sides to have buy-in to the process improvement project, along with shared responsibility and accountability for success.
Start With Strong Leadership
Establishing a strong leadership team or steering committee with members from both organizations is a critical first step. This committee should be composed of participants at equal levels of responsibility. For example, the committee might include someone at the level of vice president of a scientific discipline from both the client and the vendor. To start the process, the steering committee needs to establish rules of engagement, how communication will take place, and how frequently the teams will meet. Organizing the team from the beginning facilitates discussions on which new process improvement projects should be initiated, how existing projects are progressing, and how problems should be handled.
As the process improvement project unfolds, the steering committee can offer advice to both teams on how to break down barriers and address resource commitments. A face-to-face quarterly meeting of the steering committee is an ideal way to provide updates on the progress of projects, and allow committee members to voice concerns. The frequency of meetings and the ability to meet face-to-face is dependent upon the nature and duration of the project. A monthly conference call can supplement communication when working on process improvement projects with shorter cycle times.
The steering committee should also acknowledge the vital importance of client confidentially as part of successful information sharing during joint projects. With this element spelled out in the master service agreement, both parties are able to work together openly and honestly, and not against each other in a competitive fashion. It is important to share information, some of it confidential, to reach common goals.
Develop Common Methodology and Language for Process Improvement Projects
Once the steering committee is set up, establishing common methodology and terms is the next critical element. Six Sigma and Lean Six Sigma are strong examples of methodologies that should be in place under both organizations. The tools and techniques of these methodologies allow Black Belts to speak the same language and agree on terminology to be used throughout the project. Some examples of common Six Sigma documentation tools include Value Stream Maps (VSM), Process Maps, SwimLanes Maps and Spaghetti diagrams. These Six Sigma tools can be used to visually illustrate current and future state process flows.
Defining common operational terms from the start improves communication and circumvents potential misunderstanding. Each company is likely to have different terms for the same item. For example, in the pharmaceutical industry, some stakeholders may use the term "clinical monitor" for the individual responsible for overseeing protocol compliance and query resolution during the clinical trial, whereas others may refer to this individual as a clinical research associate (CRA). At times, when companies have different definitions for terms, it is possible to refer to published regulations in the public domain, such as Sarbanes-Oxley (SOX) documentation for financial matters, or Chemistry, Manufacturing and Controls (CMC) as defined by Good Manufacturing Practice guidelines.
As both parties discuss which terminology and methodologies will be used throughout the project, it is important to recognize that one organization may be more experienced than the other in the types of process improvement methods needed for the project. If that is the case, this difference should be acknowledged, and the opinion expressed by the more experienced partner should be given special consideration. In addition, the other party should be provided with adequate training in the various process improvement methodologies so they can function as equal partners.
Additional Factors to Consider for Successful Process Improvement Projects
In the spirit of Six Sigma, it is important to seek buy-in from both teams. This comes from giving a local voice on the process improvement project from all parties, and from recognizing the valuable experience of each Black Belt and Master Black Belt team member. This is particularly important when one company tries to understand actions that may have been taken by the other. For example, one party may have undergone a recent reorganization. The other party may not understand the new workflow, and may want the first company to revert back to the original organization structure. This party needs to respect the collective experience and history of the Black Belts and Master Black Belts at the first company as it moves ahead with reorganization. In respecting that decision, instead of pushing for more change this time, the second party can seek to harmonize with the first party through efforts to work toward a common goal.
As process improvement projects take shape, each organization will likely realize different benefits from the experience. If a supplier has become more efficient and productive due to input from the client, the supplier may be able to offer lower prices or faster delivery to this client as well as others. When a supplier helps a customer improve its process, it would be reasonable to expect the customer to place more work with that supplier, especially if the supplier helps the client bring products to market faster and at a more reasonable cost. Identifying win/win situations keeps the team energized and management extremely supportive of the initiative. In a real life example, a supplier spent approximately two days preparing a highly detailed, elaborately formatted summary report when the client would have been willing to accept the raw data in the existing format. Knowing something like this can be a win-win as the supplier saves time and effort, and the client can make faster decisions from the original data source.
There are several key considerations when planning joint process improvement projects with customers or vendors. The steering committee provides management accountability as defined in the master service agreement, encourages communication through use of common terminology and methodologies, and breaks down barriers to success. A win-win can be defined when both companies enjoy meaningful benefits from the process improvement project.