Treat others as you would like to be treated. That may be the Golden Rule in Sunday School but it’s rarely passed the lips of a business executive. Too often, the business world is one of cutthroat competition, doing anything to get an edge, being obsessive about your secrets, and winning while others are losing.

Zappos takes a different approach. The online shoe company has grown from startup to $1 billion in annual gross merchandise sales in ten years. It’s doing something right. I’ve written about Zappos before in “Zappos and a Sustainable Culture,” which looked at how Zappos developed a culture that gives it a competitive advantage, and its amazing return policy in “Do You Trust Your Customers?” It turns out the company takes a fresh approach to supply chain management, too.

In “A Lesson from Zappos: Follow the Golden Rule,” Tony Hsieh, who was hired when the company started to lead its merchandising team and is now its CEO, talks about Zappos decision to create alliances with its vendors in which “partners aligned themselves to the same vision and committed to accountability, knowing we’d all benefit from achieving our goals.” (HBR, June 4, 2010) Zappos acted on this decision with processes that are open and collaborative, including:

• Returning vendor calls the same day and responding to vendor email within a few hours.
• Greeting vendors to its Las Vegas offices at the airport by a Zappos shuttle
• Giving first-time visitors a tour of the office
• Creating an “extranet” the gives vendors complete visibility to Zappos’ business: inventory levels, sales, and profitability. “They can write suggested orders for our buyers to approve,” writes Hsieh. “They can communicate with our creative team and make changes to their brand boutiques on the site.”
• Collaborative negotiations about what’s best for the business, the amount of risk to take, and how quickly the business should grow
• Collaborative marketing

Hseih is quick to credit these relationships for Zappos’ success: “Without those friendships and their belief in us, there might not be a Zappos today. Those relationships were, and continue to be, one of the most valuable parts of our business.”

One of the core values of the Baldrige model is valuing partners. As the Criteria state, “such partnerships may be a source of strategic advantage for your organization.”

It has been, and continues to be, for Zappos.

To read more about supply chain management, click on these articles:

• Urban Outfitters’ Vendor Scorecard
• The First Healthcare Sustainability Scorecard for Suppliers
• Sustainability: A Business Imperative
• Sophisticated Information Sharing

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