"Partnering happens in several different ways.  One is partnering with suppliers.  We build a truck without a factory.  We spec everything on it.  Then we order from the manufacturer.  They put everything together, combining our specs with theirs.

When we do not possess enough knowledge of a particular process to fully understand it, we look for a partner with that knowledge.  You can outsource and partner, or go internally and "insource" for knowledge within your organization.  When reliable knowledge is not available within your organization, you need to outsource with an alliance partner who has that knowledge, add that link to your value chain and deliver it to your customers.

CAN YOU DEFINE VALUE CHAIN FOR US?

"Value Chain is a linkage of specific processes and services that deliver an ultimate service or product to the customer.  A link is not the whole Ruan system, but a piece of it."

"When we invest in someone who has the software to issue licenses and permits for fleets, we invest in resources to do that service better for the customer.  We take that value chain from the outside, link it with us and deliver licenses and permits to the field, but do it through an outsource."

DOES THIS MEAN THAT PARTNERING HAS REPLACED THE COMPETITIVE BID SYSTEM?

"The competitive bid system was not replaced by partnering, but by the Deming Management Method.  One of Deming's 14 Management Principles recommends not giving the job to the lowest bidder, based on price only.  Instead, work with your current supplier to help improve what needs to be delivered."

WHAT DO YOU HAVE TO DO TO MAKE SURE YOU'RE PREPARED TO PARTNER    

"The Value Chain is only as strong as its weakest link.  Any time we partner, difficulties begin when you try to put two cultures together.  If you are going to partner, you must have clear, operational expectations of partnering.  They have to be arrived at together, which at times can be easy, or very difficult."

DO YOU INTERVIEW EVERY COMPANY BEFORE YOU PARTNER?

"Definitely.  We have specific criteria we use for out-sourcing.  The perfect match would meet all seven requirements.  The more a company fails to meet, the more difficulty they will have joining us."

WHAT CIRCUMSTANCES INDICATE A NEED FOR A PARTNERING ARRANGEMENT?

"The market is the biggest influence.  If the market requires a specific service and you don't have it, you have to get it.  And partnering may be one way to do that."

DOES YOUR WILLINGNESS TO PARTNER PROVIDE A COMPETITIVE EDGE?

"Yes.  You're getting the expertise from your partner who many times is more qualified in a specific area."

CAN YOU GIVE US A CASE HISTORY OF SOMEONE YOU'RE PARTNERING WITH RIGHT NOW?

"Transport America comes to mind; our vice president of sales, Chuck Spang, would be better able to answer that question."

RUAN'S OUTSOURCING GOALS:

	Better productivity and efficiency
	Reduction of cost
	Better service to our customer's customer
	Benefits of volume of scale
	Reduction of risk
	Understanding of "Profound Knowledge"*
	Improve customer and Ruan Transportation processes by applying formal quality methods

* The interplay of Deming's theories on systems, variation, knowledge and psychology, and their relationship to change--a key to his philosophy of quality management.

"We lease and maintain equipment for Transport America in multiple locations throughout the country.  We cohabit facilities - some are theirs, some are ours - enabling us to work together."

HOW OFTEN DO RUAN AND TRANSPORT AMERICA GET TOGETHER?

"Very often, even if it's just over the telephone.  We also have many face-to-face meetings during the year at multiple levels within their organization.  It could be with their CEO, drivers, or middle management."

HOW WOULD YOU SUMMARIZE WHAT PARTNERING MEANS TO RUAN TRANSPORTATION?

"Ruan has been committed to the Deming philosophy since 1987.  It promotes a win/win situation, rather than the win/lose situation that often prevails in American business.  A lot of that win/lose kind of thinking, I call a disease.  Once you have it, it's hard to eliminate it.  But I think that Deming's philosophy of quality management is a key, driving force that helps us."

WHO INTRODUCED DEMING TO RUAN?

"One of our suppliers suggested we watch Dr. Deming on a national telecast.  Our president had dinner that night at the same Minneapolis hotel Dr. Deming was doing the telecast.  A couple of weeks later, our key executives were in San Diego in the front row of Deming's class."

EDITOR'S NOTE:  We also visited with Transport America to get its point of view on partnering arrangements with Ruan Transportation.   Here are the observations of Bob Stone, Transport America's Director of Fleet Management.

“Absolutely. We have created regional pockets of business with Ruan in areas where we do not have a terminal presence. Ruan provides us with facilities, driver support and equipment maintenance in areas where we are just getting a foothold. Access to these facilities has enabled us to expand our operations more rapidly.”

ARE YOU ALSO A “DEMING COMPANY?”

“Although probably not a “Deming Company,” we are quality oriented and are presently going through ISO-9002 certification. Our staff has not been trained in Deming’s principles. Our principles are really customer oriented - supplying the best possible service at the best possible price to our customers - our external customers and our internal customers, such as our drivers. We try to treat them equally and supply the needs they desire so they can be profitable and to make life easier for them.”

IS THERE A CONFLICT OF INTEREST WORKING WITH ANOTHER FLEET?

“No, we don’t have a problem. We’re not in direct competition with Ruan, nor is Ruan with us. At some locations that we use, they do maintain other fleets but we have not had a problem with any kind of competition for driver base or customer base.”

Thanks to Jeff, Chuck and Bob for explaining how alliance partnering can be beneficial when you have the right combination.

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