Effect of Culture on Supply Chain Management

Effect of Culture on Supply Chain Management

Effect of Culture on Supply Chain Management

This is the fourth post in a series of “Supply Chain Basics training to Your Employees is it Necessary?” In case you missed the previous posts, here they are “Importance of Supply Chain Management“, “Globalization Impact on Supply Chain” and “Role of Information Technology in Supply Chain Management“.

Culture, what does it mean? Let me tell a story. Once Alexander The Great met a Sadhu in India who was meditating. Alexander asked him “what are you doing?” Sadhu replied “I am practicing nothing” Alexander laughed at him. Then the Sadhu asked him “what you do?” Alexander replied “Am on my way to conquer the whole world”. Then Sadhu laughed at him. Here both of them are right in their own perspective of belief. Alexander believes that he has only one life and the person who achieves something great in that life goes to heaven. Whereas Sadhu believes that there is a rebirth. Meditating and worshiping God takes him to heaven and also attain salvation.

Here each one has their own belief. That belief came from the culture. (Greek cultures and beliefs differ from that of Indian) So there is a cultural incompatibility. Collaboration between two becomes difficult.

In a survey conducted by Commlabindia, covering 94 stakeholders from around 30 countries revealed that understanding culture was the KEY to developing relationships. Now in the supply chain there may be different departments working in different countries. All branches are interdependent. The success of managing the supply chain is dependent on the collaboration of all its partners and relationships they maintain. When the culture is not compatible, collaboration among the supply chain partners become a tedious process.

Let us see another example: In Japan personal relationships matter the most. If a foreigner turns down any casual invitation of his Japanese supply chain partner the deal fails.

Managing the Cultural Relationships

“Every age, every culture, every custom and tradition has its own character, its own weakness and its own strength, its beauties and cruelties; it accepts certain sufferings as matters of course, puts up patiently with certain evils. Human life is reduced to real suffering, to hell, only when two ages, two cultures and religions overlap”.Herman Hess

Understanding the cultural aspects of each and every department in the supply chain is very important. Even the information flow between the departments is guided by the technology; understanding or interpreting the information and negotiations plays a vital role. So culture sensitivity training to your employees is very important.

The employees can be sensitized with formal and informal training methods. But informal training method such as eLearning can be a better option for such training. This platform in addition to reducing costs, the other advantage is its sheer convenience.

In my next post I will come up with what are the reasons for the discrepancies among the various departments of supply chain and how to overcome them.

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