Establishing company culture across a global supply chain
Whether a supply chain stretches across North America or the entire globe, there are sure to be cultural differences between manufacturing sites. The key to any successful supply chain is understanding cultural differences and managing relationships across different cultures. At the same time, it’s important for a business to be able to establish its own company culture across its supply chain. This is a delicate balancing act that can ultimately be the deciding factor in a company’s prosperity.
Cultural Challenges in the Supply Chain
There will certainly be some challenges throughout the supply chain with regards to exchange rates in payments, different units of measure, and language, but these are often easily addressed with translators. The real difficulties lie in attitudes towards business and interpersonal relationships.
People conducting business in North America place an emphasis on the bottom line and speed, whereas in Japan, establishing a personal connection is an important part of a business deal. Skipping an after-work invitation to get drinks might not be a big deal in the U.S., but in Japan it could ruin a deal. Similarly, businesses in North America view written and signed contracts as binding and unchangeable, but a business in China is less likely to view a contract with such importance and could change the terms suddenly and without warning as circumstances dictate.
Attitudes toward leadership and time are other cultural differences that can lead to misunderstanding. Some cultures place an emphasis on hierarchical leadership with clearly defined roles, while others expect an egalitarian structure with shared responsibility. Additionally, concepts of time are not the same around the world. Some cultures emphasize speed, even at the risk of carelessness, while others are more methodical without concern for quickness — these concepts of time can also carry over into punctuality. Companies such as TMC offer web courses, cultural orientations, lessons on inclusive leadership, and more to help global supply chains run smoothly.
Varying labor conditions, tariffs, and more can also affect the way business is conducted and require regular changes to the way business is done. Ultimately, knowledge and patience are the best ways to address cultural differences when dealing with a global supply chain. E-learning modules are particularly handy when it comes to training for cultural sensitivity across the supply chain. CommLab is an example of a company that helps create modules that can be easily shared with members of a global team. The company also offers translation services for training platforms that need to be available in multiple languages.
Establishing Company Culture through Glocalization
As with any company, culture is established from the top down. Modeling behavior and attitudes and communicating effectively helps spread the company culture. Of course, the bigger a company gets — or the more widespread its supply chain — the more difficult it is to model and communicate desired traits. Recently, the concept of glocalization has become important in the business world as a way for companies to manage their affairs across the planet.
A combination of globalization and localization, the idea of glocalization came from the Japanese term dochakuka, which refers to the modification of established farming methods to local conditions. In the business world, the concept can be used to present a corporation’s company values to foreign cultures using examples and narratives drawn from local culture. Displaying values that promote a desired company culture around the workplace is important in every environment and is done more effectively when considering and understanding local culture.
Introducing company culture during the hiring process is a great way to start, especially for management positions. Leaders working away from corporate headquarters can then use glocalization concepts to convey the message when hiring locals. Presenting important ideals early on helps to ensure that new hires are on board right from the beginning.
Corporate retreats and training videos are great ways to reinforce company culture throughout the year. The challenge in global supply chains is to be inclusive to all cultures in these instances. Again, glocalization comes into play, presenting the material in a variety of ways that appeal to and can be understood by all participants. Making slightly different versions of training videos or splintering off into smaller groups during portions of the retreat can yield big dividends in this regard.
Following Successful Models
Globalization is nothing new, and successful companies have been benefiting from global supply chains for years. McDonald’s was one of the first restaurant chains to not only utilize a global supply chain but also to have franchises across the globe. While expanding the reach of its menu, the fast food giant employed glocalization methods by adjusting parts of the menu to appeal to the palates of locals.
More importantly, McDonald’s learned to maintain consistency of its product by maintaining a culture across its supply chain that emphasized cost-effectiveness, quality, innovation, and safety. The company eschewed micromanaging along the supply chain, giving its suppliers room to innovate, collaborate, and work in their own way as long as it was done in accordance with the aforementioned values, a decision that resulted in financial success and the admiration of the company’s peers.
Sometimes, company culture can be promoted simply by employing the right methods. Procter & Gamble is a standout company known for its successful global supply chain. The company uses its supply chain software to keep the entire chain connected, using algorithms and advanced analytics to increase efficiency and predict ordering for end-to-end planning. In doing so, they promote their value of sustainability by reducing their company’s footprint and getting the most out of land they use to make their products.
A global supply chain is necessary for companies of various sizes and the challenges that occasionally arise are minimal when compared to the benefits. It simply takes some extra planning, technology, and cultural understanding to overcome such issues.