February 8th 2008
Interlock Your Operations and Fortunes
When your largest customer dominates its industry, you can expect to share in its good fortune. This is self-evident to the executives at Keystone Foods and J. R. Simplot, two privately held (hence unranked) companies that supply McDonald’s restaurants in the United States with, respectively, meat and potatoes. They are among the many suppliers whose fruitful collaborations with the fast food chain have lasted decades, after starting with nothing but a handshake agreement.
When customer and supplier interests are so intricately entwined, the concept of teaming up with customers assumes another dimension in addition to those we have discussed thus far. As a result, my fourth strategy for winning collaborator customers calls for more than specialized expertise and a close relationship. It entails a radical commitment—not easily reversed—to joint success. Here the primary emphasis changes to the physical and strategic interlocking of the supplier’s and customer’s businesses. Continue Reading »