ASQ - Team and Workplace Excellence Forum

Online Edition — November 2002

In this issue...
Case Study and Commentary: Supply Chain Redesign
Sharing Information in Customer-Supplier Relationships
Our Readers Say...
Protecting Your Trade Secrets
Chapter News
Your Opinion: Books in Review
Book Nook
Editorial: From Our Perspective
What’s Up?
November 2002 News for a Change Homepage

NFC Index

AQP Home

Our Readers Say…

Want to know what’s happening in other organizations? To compare your business’ principles, programs, and processes to those used by others? Beginning with this issue of News for a Change, we will bring you a quick look into how other organizations are approaching our featured topic. And we’ll get the data from our most reliable sources—members of AQP. We’ll issue a short e-mail survey before each issue of NFC, and we’ll summarize the results on the front page—for those of you who want just the facts. More detailed findings will be available on another page. For this issue, we explored customer-supplier teams—particularly the exchange of proprietary information.

Level of Involvement

The first two questions determined the respondents’ organizations’ degree of participation on customer-supplier teams. We were surprised to learn that participation on these teams is not as prevalent as might be expected. The table below recaps the data summarized in the following graph.

Category Percent of Respondents
Participates only as a customer. 15%
Participates only as a supplier. 13%
Participates as both a customer and a supplier. 29%
Participates as neither a customern or a supplier. 44%
62 Respondents

Respondents from two types of organizations mentioned not participating most frequently: the publicsector, including both government and education, and commodity businesses. Several private consultants also commented that they were not involved in teams of this type.

Once an organization decides that customer-supplier teams are worthwhile investments of time and resources, the results seem to indicate that they are twice as likely to get involved as both customers and suppliers. It may be that these organizations initially got involved in a single team as either a customer or supplier and had such a positive experience that they decided to expand their participation.

Information Sharing

The next questions explored information sharing. We first asked, “Does your organization exchange proprietary information/trade secrets with its suppliers?” We followed up that question with, “If your organization does exchange proprietary information/trade secrets with its suppliers, are confidentiality agreements required?”

Many organizations provide proprietary information/trade secrets to their suppliers—even when they are not involved in customer-supplier teams. Of the 59 members who replied to this question, 36 (61%) told us that their organizations were willing to share sensitive information.

Of course, several public sector respondents commented much like this member, “I represent a government organization, and, therefore, any best practices that we use are readily available and are shared with other entities.” Similarly, another government-based participant said, “As a government organization, most of what we do can be obtained through Freedom of Information processes anyway, so we don’t withhold information unless we believe it will be used irresponsibly.”

Not all organizations are so willing to share information, however. One member stated, “At times, our tendering data information have been leaked to competing firms by the client (owner) calling for a tender. This causes us to reveal as little detailed information as possible in our tendering work, depending to a certain extent on the perceived reliability/trustworthiness of the client.”

Only 43 of the survey participants were able to answer the follow-up question on confidentiality; several commented that they were not sure of their organization’s procedures in this area. More than two-thirds of the members who were able to provide a response, however, told us that their organizations did require confidentiality agreements before sensitive information is exchanged.


Our final yes/no question addressed the underlying concern that causes many organizations to tread lightly when it comes to exchanging proprietary information/trade secrets, “Has your organization ever experienced a leak?”

Once again, many of the respondents weren’t sure, but 26% told us that this had been a problem. One member, whose organization had been involved as a customer, told us, “The supplier was very upset with us and amends had to be made. It was a three-way arrangement, and we leaked to the other supplier. The project never got off the ground after that.”

Another member commented, “Yes, where one of our contract consultants mistakenly left confidential customer information for one customer at another customer site. The customer at the second site alerted us to the highly proprietary information she found. After recovering from the embarrassment, the contract consultant was taken off the project. We met with the owner of the confidential information and painfully explained what happened. It took us at least a year to recover from that area.”

One person mentioned, “We are mostly a commodity business. We do have customers visit the plant. We show them most things. We request they do not share information and have, on occasion, had them sign confidentiality agreements. That we know of, there have been no competitive issues.”

“We experience the customer/supplier relationship from both viewpoints, more often as the customer. Depending on how critical the information is we may require confidentiality agreements before we begin working together. While we have not experienced a major leak that has damaged our competitive edge, we have, on numerous occasions, been given unsolicited tidbits of information from our suppliers on our competitors’ statuses. I am proud to say, however, that we do not pursue that line of information nor have we used it to affect our planning or scheduling in any way whatsoever. We have a plan, we work that plan regardless of what the competition is supposedly doing. To the contrary, we have even escorted a vendor from the mill because of his loose tongue about our competitor’s proprietary information. (If he’s talking to us about our competitor, he no doubt shares information with them about us!) At the end of the day, we must be able to lie down on our pillow, knowing we’ve done the right thing. To compromise our integrity for the sake of competitive advantage is really no advantage at all.”

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