15 Apr 2017, 14:50

Cloud Providers as Lean Suppliers

“Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.” - Deming

One of the parts of Lean Manufacturing is that any optimization that only focuses on your is the same as any optimization that’s focused on one part the floor - “an illusion.” It’s a local optimization and doesn’t look at the system as a whole. You may not actually improve anything. There’s a pragmatic approach to it, so sometimes you focus on your sphere of control instead of just your sphere of influence, or you wait till “the right time,” but the point remains. You have to look at your supplier (or consumer) and see where optimizations there can make your delivery more optimal. This is so prevalent so that’s even books on it regarding Toyota’s, the Lean poster child, supply chain.

Now, being able to have that kind of influence on your supplier is a tricky prospect. Some simple thoughts is that it requires a relationship where you as the customer have a lot (maybe undue) influence on the supplier that the supplier is coerced into doing what you want, or that the supplier is so customer focused that they’ll do anything that you want. The simple thought with regards to Toyota falls into the former category. The not so simple thought is that this interaction hinges on a deep (not just lengthy, but to the degree of interaction) and mutually beneficial relationship. The key to a relationship is that both sides work on it and work a lot of give-and-take into it.

This is quite the opposite from a push to multiple suppliers that are all interchangeable. Establishing the relationship is secondary to being able to switch away from a supplier at any time for any reason.

The truth is that nothing is black and white, and different situations are at a different level of gray. One company may work very hard to be supplier-agnostic, while another may work very hard to establish deep relationships.

The same plays out in the IT arena - in multiple ways and multiple levels. You have long standing deep relationships with existing vendors, and you have senses of “this vendor is interchangeable.” Interchangeable is always iffy, as that depends on the commoditization of the both the technology and the process that uses it, but it is a goal that is longed for. This works down even to code level where one interface may have multiple implementations. Whether that that last logic is the source for that logic showing up in vendor management is anyone’s guess.

Today it’s an open question of how deep does an IT group get with a Cloud Provider. It’s not an easy statement to say that that should never be very deep. Even if you maintain a hard line of only relying on features that have parity across multiple vendors, you still have to make sure that the interface surface for managing those features are on par. There’s many types of lock in that we tend to underestimate the size of the interface surface (even to the point of ignoring many parts of it).

“But how do I maintain a relationship where I’m tied into a lot of them, but that I’m only a small part of their revenues?” Well, there’s no simple answer. The Cloud Vendors are some of the largest companies in the tech industry, and hard to hold any cards over. But they got where they are by having a huge focus on the customer (Amazon even claims to be the most customer-centric company on earth), so you can assume a bit of work to be done connecting with you.

The best advice I can see is “be pragmatic and mindful, and make sure you’re communicating.” There’s going to be issues maintaining that relationship, and there’s going to be risks with having that relationship. Don’t go into it expecting a silver bullet or that it will never be rocky. There will be bumps on the way, and there will be back-and-forths. The key is to know that you have to work at it, and make sure each side knows what that work is. And realize that sometimes it’s just necessary to lift a lot yourself to be able to move over to a new relationship.