Importance of Trust
in Supply Chain Management
One of the most critical
factors in a committed and collaborative relationship between supply
chain partners is trust. If trust is present, it can improve the
chances of a successful supply chain relationship; if not, transaction
costs can rise through poor performance.
Organizations need trust in order to be flexible and agile. However,
establishing trust can be elusive and even harder to maintain. It is
also true that trust is both individual and institutional. Trust in a
supply chain evolves based upon commonalities among the partners and
can take patience and time to develop.
There is both risk and interdependence in a supply chain relationship
and there must be an implicit agreement not to exploit the partner’s
vulnerabilities. This takes development, honesty and openness to be
In fact, the main components in trust in supply chains are honesty,
loyalty, fairness, openness and competence.
Companies must be careful to “optimize” this trust as it can take
resources from other aspects of the supply chain (and risks) to develop
this. So they must be careful not to over or under invest in developing
trust. The value of the specific relationship must first be made clear
so that it can be determined what effort will be
put forth in developing this trust.
It is apparent that trust only exists when both parties think it
exists, that it is critical to treat supply chain partners like they
are important, information needs to be shared freely, and that partners
need to follow through with promises made.
LPA, LLC is a
Supply Chain software and consulting
business offering affordable, easy-to-implement solutions to complex
planning problems. Our Managing Partners have over 40 years of combined
Supply Chain and Information Systems experience.
Contact us today to receive a Brochure along with our
MS-Powerpoint ® Overview
slide show which describes our products general capabilities (we also
have a more detailed PSI
Planner "Guided Tour" slideshow available upon request).
After viewing the slide show, let us know if you'd also like
to schedule a LIVE WEB DEMO for a more detailed understanding
of its capabilities and how it can make your Supply Chain "Lean" by
improving your company's service levels and inventory turns (click on "News
and Events " for more details).
Our company also offers Supply Chain consulting services at
reasonable rates. We invite you to contact us for a consultation
regarding your specific needs.
Read current information on Five
Stages of Supply Chain Maturity
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