Partnering with your competition – A Lean thought

Lean ideas come from various people. Most of the times those people are not known for their lean manufacturing capabilities. I found one such idea from an online video when some manufacturers demonstrated their processes. So I thought of sharing that with you.

You have competition because there are other people doing the same or similar business in the market. Isn’t it? When you have competition this means your competitor needs almost identical raw materials and machinery and processes to carryout manufacturing. So you and your competition both have a set of common requirements. How you fulfill them. I am sure you will be talking to the suppliers and to your customers separately. This makes perfect business sense. But how about partnering with your competition in fulfilling your requirements? Sounds shocking? It will be, in a traditional business context. But in lean manufacturing suppliers and customers are always treated as partners. I am simply asking the question why shouldn’t we apply the same to the competition as well. We of cause will have to think little deep from a business sense in this. But there are endless possibilities, both you and your competitors can benefit as a result your customers will benefit. Let’s look at an example.

If you are in the business of assembling bicycles, you will need gear wheels. Your competitor also will need them. You might be buying them form a supplier who is located in China and your competitors will also buying from him. When you place your orders separately, supplier will take order by order, finish them and ship to you individually. Each one of you have lower bargaining power with the supplier, and you also will loose money on freight. Doesn’t it make sense to combine both orders and send a single order to your supplier (I understand there are some legal aspects you have to cover before you do this). Supplier will get more clarity regarding the order and from the suppliers point of view you will not be competing for his capacity. Sound great isn’t it?

Think about it. If you do you will discover endless possibilities to eliminate waste from this world.