Boeing’s assembly plants are the final stage in a long and hugely complex global supply chain. It has about 1,200 “tier-one” suppliers, which provide parts directly to the planemaker from 5,400 factories in 40 countries. These in turn are fed by thousands more “tier-two” suppliers, which themselves receive parts from countless others. Beverly Wyse, who oversees production of the 737, admits that it has sometimes been a job to persuade all these suppliers to invest enough to meet future demand. To do so, Boeing has had to learn to be more open with them about its production plans, and a bit less paranoid about whether such information might reach the ears of its competitors.
Such an action is probably less difficult for a company like Boeing that doesn’t have competitors. They have a single competitor: Airbus. And, as the article points out, both have queues of orders four years (Boeing) and eight years (Airbus) out. That might seem great for Airbus, but those deals are on models that will be outdated by the time Boeing has secured additional orders (and the global oil situation may change, calling for even greater fuel-efficiency over against other qualities).
When negotiating, one needs to balance this wisdom of sharing for partnership and withholding for protection (based on the relationship). “Bad, bad,” says the buyer, but when he goes away, then he boasts” (Proverbs 20:14). He boasts because he got what he wanted for the value he thought it was worth. This is one great aspect of free enterprise. Excepting government regulatory demands, you don’t have to buy something you don’t value more than the money is costs you to buy it. Thus, the buyer boasts because he didn’t feel cheated. He felt he was shrewd. The seller sold. He may have felt cheated, but we don’t know from the proverb. We do know that, in general, sellers don’t sell if they can afford not to when it isn’t in their interest. And, buyers have traditionally had greater leverage in business. The U.S. business culture is one of the most egalitarian when it comes to profit-sharing between buyers and sellers. Most countries’ business cultures favor buyer bargaining power.
Also, regarding the flow of information, when evaluating how much to share, business leaders need to consider this question: Are you cooperating or collaborating? Cooperating is working together toward a common end today. Collaborating is choosing to work together toward a common end tomorrow. The future focus of collaboration allows for more fearless information-sharing. Cooperating today is evidence that what is being done today is still in the other party’s interest. But, that must not be confused (as we saw with Oracle and HP), that I should expect the same relationship tomorrow.
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