People love a good story. It is a great way to engage them in a subject that takes them out of that classroom feel of dry learning and puts them squarely in the middle of a story that just happens to also be teaching them new information. I discovered such a story recently.
In the Korean TV series Hello Me, a snack manufacturing firm, Joa Confectionary, breaks off relations with an organic strawberry farm that supplies ingredients for one of its most profitable confections. For reasons for which it was not responsible, the farm delivered a promised shipment of its strawberries late. Joa Confectionary, desperate to meet its production deadline, panics, makes a switch to another supplier, and refuses to pay for the late shipment, making it a total loss for the supplier.
The organic strawberries fields forever from that farm are unique
However. They have a special taste that gives the snack using those strawberries its popularity. After the switch, consumers stop buying, and Joa sees purchases of its snack plunge.
Management commissions the Product Development department to go to the organic strawberry farm and negotiate a new contract. A meeting is arranged. But the farm owners are furious. They feel that Joa cut them off curtly and unfairly, without notice or compensation. They no longer trust the firm or want to do any further business with them. In fact, they plan to stop growing any further strawberries, and plan to switch to growing other items entirely. They storm out of the meeting.
The Joa team is at a loss. The farm is the only supplier of organic strawberries available. They have no other options. A new contract with the strawberry farm is critical, but standard negotiating tactics have completely failed.
Then a member of the Joa team, on her own initiative, calls a chef she knows and gets him to share several recipes for table treats involving strawberries. She prepares them and calls the strawberry farm owners and the Joa team together again. She presents the treats—baked strawberries, fried strawberries, pickled strawberries, strawberries mixed with yogurt, strawberries marinated in liqueurs—and simply invites everyone at the table to have a taste. They do. The treats are exquisite. Eyes roll at how delicious each one is.
The Joa representative speaks. First she apologizes again at her firm’s abrupt break with the farm, but then she points out how clearly delicious and desirable the treats are, and how many such marketable treats the farm could profitably help supply to the public. She points out the pleasure and happiness the treats could bring to thousands upon thousands of consumers. She asks them to reconsider what a valuable and meaningful product they offer to the public and to Joa, and to give Joa another chance.
The farm owners grumble a bit, but do reconsider—and agree.
Afterwards the Product Development team leader presents the new agreement to management, but adds a further recommendation. She asks the company to pay for the previous shipment on which they had stopped payment and to include a bonus to the farm owners for their willingness to partner with Joa again.
A member of the management team bristles. “That’s means we’ll take a loss. Joa is not in business to lose money.” The team leader agrees that it will mean a monetary loss this one time—but that it is the honorable thing to do. It will re-establish trust where trust has been lost, it will lift Joa’s reputation in the industry as a fair and responsible partner, and it is quite simply right and proper. Joa and its leaders and employees must know that the company holds itself to a high ethical standard. The decision will benefit the company spiritually, and a company with pride in itself and self-respect can only flourish.
The CEO listens carefully, smiles, and nods in agreement. The arrangements are made.
I love this episode. First, I love it for its lack of jargon. For once a supply chain crisis is presented without reference to key performance indicators and omnichannels, burn rates and bull whip effects, without EDI and JIT and FIFO and LIFO.
Yes, all those matter a great deal, but in the end, a supply chain is a set of interactions between people. I can think of few depictions of a supply chain problem and its solution that so simply and economically presents the human reality of supply chain operations.
Almost without exception supply chain analysts describe existing supply chain situations and possibilities in terms of pie charts, timelines, Powerpoints, and in a word abstractions.
Yet the truth is that the supply chain is not an abstract process at all but a story, a living narrative of real individuals working in coordination with one another to complete a mutually and socially beneficial task.
We can extract an abstract description of that story—and it’s smart to do, for numbers and graphs can tell us an incredible amount about the efficiency and effectiveness of what is happening. It is a very good and valuable thing that supply chains are a series of measurable events.
But ultimately those events are performed or overseen by people, and the emotions and expectations and relationships that drive those people are what makes the entire process operate, what brings it alive. Understanding the process as a story whose parts are played by uniquely individual human beings, as a narrative, gives you a vastly more in-depth grasp of what is actually going on, of what is possible and what is not in a given situation.
That is another wonderful thing about this short episode. All the conventional recommendations that would normally be given are a mistake. On-time delivery is mandatory, and any failure for whatever reason is unforgivable. A supplier is late? Find another supplier. Always aim to take a profit, and if it means your supplier takes a loss, so be it.
Every statement is reasonable business practice, and yet as applied in this instance, they result in significant losses for both business and supplier, and nearly destroy the supply chain and entire product lines with it. The actions that eventually are taken are counterintuitive, but save profitable product lines for both parties, and revive a mutually profitable business relationship.
Why? Because a narrative reading sees deeper into the actual situation. The negotiators realize that they are not dealing only with profit margins but with feelings of distrust, betrayal, resentment; that a prime element in a good working relationship is mutual trust. The narrative approach gives the Joa negotiating team a fuller, three-dimensional, in-depth view of the needs of the supplier—the emotional as well as purely fiscal requirements that need to be satisfied. Far from putting data aside, this approach adds information, critical information, to the understanding of the situation.
As I watched, I couldn’t help but think of the present-day supply chain situation and how these principles could apply. If, as Joe Biden tells us, “The pandemic is over,” then where do we stand now? Like the companies in the television show, we stand in the wreckage of many of our business relationships. Suppliers have failed businesses, and many businesses have cut them off cold and often gone grasping after the first alternative supplier.
Whether their service and what they supplied was better was not the issue. Sheer survival was.
Consumers and businesses have the same broken relationships. Entire shelves of products gone, buyers drifted to other products. Some of that market may never return.
How do we restore these broken relationships? Through active outreach. As businesses recover, companies must make an active effort to re-connect with former consumers, former suppliers, former partners, and former relationships. I contend that, for the supply chain industry, what I call a narrative approach is the best way to do that: to attempt to see things from the others’ perspectives, to fathom their living challenges and experiences and expectations, to understand their story—and with that understanding, to create a new story, together.