The Role of Trust in Supply Chains
Simon Popley, Senior Partner Leadership & Coaching, Logistics Executive Group
Does your leadership culture focus on trust as a key to successful supply chains?
Successful supply chain, freight and logistics activity have always been, and are increasingly so, dependent on a high degree of collaboration and trust. Trust is an important part of a high performing, cohesive businesses and the teams that drive them. Trust is also pivotal across all areas of the supply chain with suppliers, customers, partners, leaders and teams at all levels of operations.
In today’s dynamic traditional and eCommerce, omnichannel, artificial intelligence, Industry 4.0, machine learning, 3D printing, robots, cobots, and the digital supply chain and the last mile conundrum, building cohesive teams to manage / lead change, enabling and reinforcing trust at all levels, from a technology and human perspective, is critical to success.
eCommerce is booming, blockchain continues to press as a significant supply chain and logistics enabler. Blockchain is a term widely used to represent an entire new suite of technologies. Whilst the upsides of blockchain technology are widely heralded, there is mistrust around the technology as it is yet to be fully understood by many across the supply chain landscape.
Retail eCommerce sales worldwide as predicted by eMarketer, will increase to $4.058 trillion in 2020. Having said that, eCommerce customers are becoming more aware of fraudulent practices and trust is crucial. The onus on rapidly increasingly numbers of eCommerce players is to build trust through transparency of processes, especially through their main customer interface, their website.
What is Trust and Its Role in Supply Chains?
Understanding the nature of trust is important. The problem with a word like ‘trust’ is that we all believe we understand it. ‘Trust’ in at least that sense, is taken for granted. That makes it all the more critical to ensure all parties involved in any given supply chain activity or process, are well aligned.
Key elements of trust are honesty, loyalty, fairness, openness and competence.
Many Supply Chain and Logistics organisations are well advanced in leadership development and executive coaching programs. Leadership through enhanced engagement including building trust with customers, suppliers and internal team members, is increasingly a top priority for many. Trust is a multifaceted complex phenomenon, which integrates psychological processes and group dynamics.
The adoption of leadership development and executive coaching as an effective business tool / process in the supply chain and logistics industry to improve business outcomes, is about 10 years behind other sectors (e.g. banking / finance / insurance / media) but the value proposition of this investment is increasingly being understood and leveraged.
Trust may present as a trait, a process or an emergent state and exist at individual, team, and leadership, organisational and inter-organisational levels. Trust evolves over time, developing, building, declining and resurfacing in relationships.
Without trust, supply chains would cease to function, it represents the unwritten view of a shared reality which allows organisations and the people that drive them, the confidence to collaborate and transact.
Building trust in an organisation:
Trust and respect form the foundation of quality business (and personal) relationships.
Common issues we regularly see in supply chain and logistics organisations, often in 3PL / CL and Freight Forwarding organisations, that undermine trust are:
- Conflicting agendas of internal management teams and between suppliers and customers.
Often there is a strong talent pool across leadership teams, but they are not all aligned to overall strategic plans, or the plans are not reinforced to the team creating competing priorities and divisions that are running their own agenda often varying off the agreed strategic (or operational path).
- Poor people and mission management and leadership skills in key executive positions.
Often talent is sourced/promoted based on short term commercial performance only and the people skills and emotional intelligence (EQ) is lacking. Without EQ trust can be compromised.
- Competition between BUs / operating divisions.
Competition functions, departments and units. The old sales v’s operations mentality. Finance v’s IT etc. Negatively focused internal competition is inherent in many organisations and needs to be called out and addressed. The atmosphere is often tense with BUs / divisions not helping each other to achieve the organisation’s strategic and tactical objectives.
A key aim of most organisations is to grow and thrive, but to achieve this, internal and external partners must attain a high level of trust in each other.
More supply chain organisations are leveraging coaching expertise for team building initiatives, to ensure their organisation possesses a desire to improve team engagement and trust. If trust within and between your teams is lacking or severely broken, addressing the underlying issues can be not only a valuable investment, but ultimately the difference between wider business success or failure.
Simon Popley is senior partner, leadership and coaching, and Carly Amado is a Senior Associate, talent and coaching of the Logistics Executive Group. The Logistics Executive Group is celebrating its 20th Anniversary of talent acquisition, development and deploying bespoke and coaching programs from their offices throughout Australia, Asia, India and Dubai. Contact Simon Popley at firstname.lastname@example.org, or Carly Amado at email@example.com. ■
Simon is an executive coach and leadership development consultant with over 20 years of senior leadership and coaching experience in a wide range of industry sectors including health care, financial services, Government and consulting. Simon specialises is coaching leaders and executives who want to take their leadership to the next level of development. Simon has worked with a wide variety of clients in Government, private enterprise and the not for profit sector. Simon works and partners with both individual leaders and their teams.
An experienced HR professional with over 15 years’ experience across the Logistics, Transport and 4PL industry in Australia & NZ, Carly has recently joined Leadership Executives as a Senior Associate in our Melbourne office. She works closely with our global team on numerous projects varying from search to consulting both locally and across the group.
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