I’m pretty sure that so far as B-to-B, especially a supplier-customer relationships go, it often is limited to nurturing the business relationship in terms of maintaining cycle time and quality of products. A relationship other than this kind will mean sharing trade secrets. I think businesses wouldn’t want to divulge their corporate secrets just yet.
However, a survey done by McKinsey & Co. in June 2005 finds out that leading B-to-B companies that conduct collaborative projects with supply chain partners and end customers increase their revenues and profits by more than 20 percent on average. What is more interesting is that one company’s knowledge of Six Sigma processes pushes it to establish a tie-up with its end-user.
SGL Carbon, one of the world’s leading manufacturers of products made of carbon, graphite, and composite materials for industrial and aerospace applications, launched a joint project with UK’s largest producer of electricity, British Energy.
Hans Bohnen, a Six Sigma Master Black Belt and quality leader at SGL, spearheaded the project. Graphite is the tie that binds the two companies. British Energy produces nuclear electric energy for the world. SGL produces the graphite from which nuclear reactor sleeves are made. The procedure was that SGL would send the graphite from Germany to Westinghouse Springfield Fuels (WSF) in England to have the sleeves assembled for British Energy. This set-up proves costly. On the other hand, SGL wanted to keep the business relationship with both WSF and British Energy.
Six Sigma’s DMAIC tool, which was used a product development tool in this case, helped the three companies work out a plan that boosts the use of graphite in other applications, not just for generating nuclear sleeves. Using the Lean Six Sigma element, Value Stream Mapping, the three companies enjoyed the following:
Full story here: Collaborative Six Sigma Project Benefits Three Companies
It is really amazing how a quality methodology, like Six Sigma, can not only improve internal processes but external relations as well. As companies launch Six Sigma initiatives, they discover other use for them. The DMAIC process is very powerful. You discover a lot of things about your organization, the structure, and even the bottlenecks in the system.
To me what SGL did—involve its customer with its Six Sigma processes—is a good thing. If you are an organization trying hard to improve your cash flow, increase revenues, establish a competitor-resistant customer relationships, and achieve greater marketing accountability, then you may want to try what SGL Carbon did.
