Best supply chain partners look beyond the upfront cost, RILA speakers say

The best way to forge business partnerships that drive efficient supply chain operations is to create collaborations that focus more on long-terms goals than immediate finances, executives from real-life partners said in a panel discussion today that featured clothing retailer TJX, railroad BNSF, and trucking company J.B. Hunt.

“It isn’t always about cost,” Raina Avalon, EVP Logistics at TJX, said in a session at the Retail Industry Leaders Association (RILA) trade show in Dallas. Instead of measuring the simple financial cost, building such powerful bonds requires tight relationships, she said. “You need the ability to have the difficult conversations, too, and share information when it isn’t going so well. Because our merchants have long memories, so we have to be able to move product more quickly.” 

That deep collaboration comes in several forms for the three companies, including the recent launch by BNSF and J.B. Hunt of a joint “premium intermodal” service they call Quantum, that they say combines truck-like precision with a 95% on-time delivery rate. 

Whether they’re building a new service or serving a shipper, the strategy is the same: “The longer relationship you have, the more you can eliminate waste,” Shelley Simpson, president of J.B. Hunt Transport Services Inc. said. In this case, the three companies decide on a 3 to 5 year plan, have annual checkpoints, and meet for quarterly reviews, the speakers said in a session titled “Strong ecosystem partnerships: Collaborative planning to tackle big challenges.”

Katie Farmer, president and CEO of BNSF Railway, echoed that point, quoting a previous leader at her company who used to say, “The truth will set you free, but it’s going to make you really miserable first.” That tough approach pays off in the long term, though. “Our retailer partners who work out best do step out of the transactional and into strategic planning. And when you do that, you can eliminate inconsistency, reduce waste, and improve quality of service,” Farmer said.