When Harry Gordon Selfridge said “the customer is always right,” he was trying to convince consumers they’d find good customer service at his London department store, and inspire his employees to provide it.
But that’s retail. In supply chain, following the same philosophy might backfire — leading to supplier role conflict.
The problem begins when a customer asks the supplier to make accommodations outside of their contract. Maybe the customer wants an extra report, a change in production or an investment in technology. The supplier, providing good customer service, fulfills the request. But by doing so they may be harming the relationship more than securing it.
A 2016 academic study, “Supplier Role Conflict: An Investigation of Its Relational Implications and Impact on Supplier Accommodation,” examined this phenomena, surveying 119 purchasing professionals with an average of 15 years of work experience and 123 supply chain professionals with an average of 10 years experience. Each were asked to respond to the same scenarios involving changes in production and equipment investments.
This is what they found:
Suppliers are often expected to make accommodations, but when boundaries are pushed too far past the supplier’s contractual role, the supplier can develop a negative view of their relationship to the customer. The supplier may also be less willing to make accommodations in the future.
More interestingly, prior investments in supplier adaption only increase the negative impacts of supplier role conflict, despite suppliers getting a return on prior investments. Layering extra-role requests on top of adaptions made out of supplier role conflict adds insult to injury, worsening the relationship and willingness to adapt.
Supplier role conflict didn’t have the same negative impact on customers though, suggesting the detrimental impact only affected the party experiencing the conflict — in this case, the supplier.
How to avoid — or reduce — supplier role conflict
The researchers suggest customers and suppliers should establish clear roles and responsibilities for suppliers up front. And any issues should be discussed during performance review meetings.
Customers may also want to consider shouldering some of the flexibility or adaption requirements they are asking for. That may mean footing the bill for investments in equipment, technology or products needed to fulfill the request.