FEATURE – Collaboration with suppliers, rather than a merely transactional relationship, has to power to transform a company’s operations, fostering innovation and building resilience.

Words: Rémi Pigeol

During a recent gemba walk at an automotive refurbishing plant, I had an insightful conversation with the site director. He mentioned his plans to change paint suppliers for the third time in five years, due to dissatisfaction with their service. As the discussion deepened, he expressed frustration with other suppliers as well, criticizing their lack of speed and punctuality.

He then elaborated on the specific issues: frequent delays, incomplete deliveries, and inconsistent quality. These challenges directly disrupt production, he told me, causing interruptions and increasing stress among the teams. On the ground, they manifest through queues of vehicles waiting to be painted, overloaded kanban boards, and frequent downtime. The teams, already frustrated by these recurring disruptions, feel a growing sense of disillusionment.

I asked him a few simple but revealing questions. “How often do you meet with your suppliers?” “Do you invite them to your site to understand your needs?” “Do you visit their sites to see how they operate?”

His response was vague: “From time to time, if not rarely. But they were efficient at the beginning,” he said.

This answer highlights a fundamental issue: a transactional approach to supplier management, focusing solely on short-term performance without aiming to build a meaningful collaboration and seeing the value that a long-term relationship with suppliers can generate. In a competitive and constantly evolving world, it's crucial to rethink how we view and interact with suppliers. Rather than treating them as mere executors, we should see them as true partners. This shift encourages trust, collaboration, and mutual improvement, strengthening the value chain and driving innovation.

This reminds me of an experience at Aramisauto’s vehicle refurbishing plant in southeastern France, where the final cleaning stage of vehicles (the penultimate step before photographing and posting online) was outsourced. The plant had changed subcontractors three times in five years due to unsatisfactory performance. Recurring issues included an inability to keep up with the continuous flow of vehicles at peak times and complaints about a lack of work or surplus staff during slower periods. Despite these evident challenges, interactions with the subcontractor were mainly limited to price negotiations and heated discussions about who was responsible for what problems.

After another failure, the plant recognized the need for a fundamental change in its approach. It implemented daily meetings with the supplier to share short- and medium-term volume projections, improving communication. By integrating the supplier into morning meetings, it fostered the mutual understanding of daily challenges and objectives.

The plant also began training the supplier in lean tools, such as 5S, problem-solving, and the use of Obeya, with not only improved efficiency but also created a common language that strengthened collaboration. This integration process built a relationship based on trust and mutual respect, allowing for smoother operations and better vehicle cleaning quality.

Today, this supplier is a key partner and a major enabler of Aramisauto's success. Having been in place for over five years, they have not only hired new staff and stabilized jobs but also reached significant achievements.

Thanks to this collaboration, cost increases have been limited to just 1.6%, well below market standards; we saw a 50% reduction in the space required to perform the same work, freeing up valuable room for other strategic activities; and we experienced a 15% increase in customer satisfaction. Since being integrated as a true partner, the supplier has stopped representing a bottleneck in the reconditioning process and causing production stoppages.

This transformation highlights the positive impact of a partnership based on collaboration and continuous improvement, enhancing both operational efficiency and customer loyalty.

I have also observed how strengthening partnerships helps navigate crises more effectively. The Aramisauto plant I discussed above, for instance, was able to overcome difficult times thanks to strong partnerships with its logistics providers.

This began with a crucial decision: establishing fair and equitable rates. By choosing to pay a reasonable price for transport services, we demonstrated our commitment to the economic viability of our partners. This approach quickly built a foundation of trust, allowing for a balanced distribution of financial risks.

But our commitment didn’t stop at the financial aspect. At the plant, drivers benefited from respectful working conditions. By ensuring their well-being, Aramisauto has established a culture of loyalty and mutual support.

In parallel, the company emphasized transparency. By providing visibility on volumes and activity forecasts, it enabled logistics partners to better plan their operations. This reduced uncertainty and mitigated market unpredictability risks, creating a more stable environment for all stakeholders. It all starts with better understanding of the production plan and frequently communicating with suppliers to get to know each other.

Then came the transport crisis, which profoundly impacted the sector between 2020 and 2023. The COVID-19 pandemic slowed production and disrupted supply chains, while the semiconductor shortage extended delivery times. Port blockages and rising logistics costs further exacerbated difficulties for logistics companies, making shipments more expensive and less predictable.

Despite driver shortages and rising costs, however, Aramisauto could rely on the unwavering support of its partners. Grateful for the respectful treatment and visibility received, their prioritized their long-standing relationship with us, ensuring drivers would be available to us and limiting price increases, enabling us to maintain smooth operations. While the broader market saw an average annual cost increase of 7% year after year (including fuel), Aramisauto managed to moderate the increase to just 5% annually, including fuel costs.

Clearly, there are several benefits to such partnerships:

- Firstly, operational continuity was maintained even during major disruptions. The privileged relationships also helped contain increase in costs and access limited resources, providing a significant competitive advantage.

- Close collaboration with logistics providers facilitated the quick resolution of issues and adaptation to market changes.

- Finally, partner loyalty and commitment were strengthened, with logistics partners more inclined to make us a priority.

In the automotive transport sector, where disruptions can have significant consequences, building solid partnerships with transporters has proven to be a major asset. By investing in these relationships, we not only overcame crises but also built a more resilient and prosperous future.

THE TOYOTA VISION: TRUST AND SUSTAINABILITY

Toyota has always considered its suppliers essential to its success. Their model is based on long-term relationships built on trust. This approach aligns strategic objectives and creates synergies that are conducive to innovation. Instead of optimizing each transaction, Toyota works with its suppliers to optimize the entire value chain.

Strong partnerships rely on open communication and shared goals. Transparent relationships enable both parties to resolve issues together and work toward sustainable solutions. By integrating suppliers into continuous improvement initiatives, companies not only enhance their efficiency but also create a resilient supply chain capable of adapting to market changes, with tangible results.

The most compelling evidence of the effectiveness of Toyota’s collaboration with its partners is its ability to maintain production during the global semiconductor shortage. While many competitors faced significant slowdowns or had to altogether halt production, Toyota secured priority access to critical components thanks to its deep, transparent relationships with suppliers. This enabled the company to minimize production disruptions, demonstrating the resilience and efficiency of its partnership model. These outcomes clearly illustrate that Toyota’s approach nurtures both operational excellence and a sustainable, resilient business model.

THE CENTRAL ROLE OF RESPECT FOR PEOPLE

Michael Ballé, our sensei, often reminds us that respecting and developing people is not just a guiding principle but the cornerstone of any successful transformation. We now know that this philosophy extends beyond internal teams to include suppliers and other external partners.

Aramisauto has applied it to the letter, developing its own model, the “Aramis Performance Engine”, which fosters a learning culture to create customer value through people development (develop people to the highest standard through problem-solving and chasing waste).

This model, which is applied across our sites and extended to our suppliers, emphasizes key principles, such as “Teamwork first”, “People are the solution”, and “Always raise the bar”. By leveraging this approach and leading from the gemba – the place where value is created – Aramisauto ensures that both internal teams and external partners are aligned and committed to mutual growth and success.

Viewing suppliers as integral partners rather than mere service providers involves recognizing their unique expertise, valuing their contribution, and supporting their growth. This mutual respect creates a collaborative environment where both parties can thrive. It encourages open communication, trust, and a shared commitment to continuous improvement.

When companies cultivate these respectful relationships, they unlock numerous benefits. Suppliers who feel valued and supported are more likely to go the extra mile for you, leading to increased agility in responding to market changes, improved product and service quality, and more efficient operations. Moreover, this partnership approach often results in cost reductions through joint problem-solving, streamlined processes, and innovation.

CONCLUSION: A WIN-WIN SOLUTION

Reflecting on the initial challenges faced by the automotive refurbishing plant, adopting a model focused on the development of people and respect for partners could significantly benefit their operations. By moving away from a purely transactional approach and embracing a partnership model, the plant can nurture better communication, build stronger relationships with suppliers, and drive mutual improvements.

Transforming suppliers into strategic partners is no easy task. It requires an investment of time, energy, and commitment. But the results speak for themselves: a more resilient supply chain, more harmonious relationships, and enhanced competitiveness. True lean success is not measured solely internally; it also depends on your ability to transform the ecosystem around you.

_THE AUTHOR