Most managers think inventory, capacity and cash are assets. I learnt during a turnaround that trust can be an equally valuable asset.
The Incident
During one of my turnaround assignments as CEO of an export-oriented manufacturing company…… ……..One day, a supply chain partner walked into my office with a problem.
Acting on a verbal assurance from our VP-Marketing, he had positioned a container to lift export material from a subcontractor. Unfortunately, the expected Letter of Credit from the overseas customer had not materialized.
The container sat idle for three weeks.
Demurrage charges mounted to an astronomical amount.
Our VP’s defense was simple:
“There was no written commitment.”
Technically, he was correct.
But I disagreed.
I told him that a company’s integrity does not begin when a contract is signed. A word given to a supply chain partner is also a commitment.
We informed the dealer that the company would stand behind him and help resolve the issue.
The next challenge was the demurrage itself.
The transporter involved happened to be led by a gentleman with whom I had worked many years earlier. During that earlier association, I had always insisted on fairness, honesty, and transparent dealings.
When I explained the situation, his response was immediate:
“No one should charge your company unreasonably.”
The Unexpected Outcome
84% reduction in demurrage
The Long-Term Outcome
The same partner later helped identify the eventual buyer.
Supply Chain Lesson
Trust creates:
- Faster problem resolution
- Better collaboration
- Lower transaction costs
- Greater resilience during crises
- Long-term reciprocity
Modern Relevance
In an age of AI, analytics, ERP, and automation:
Relationships still matter.
And relationships are built on values.
Conclusion
Modern supply chains are increasingly powered by AI, advanced analytics, ERP systems, and digital platforms. Yet, when disruptions occur, it is often trust—not technology—that determines how quickly problems are resolved. My experience taught me that integrity is not merely a personal virtue; it is a strategic asset that compounds over time. Like inventory, it must be built patiently. Unlike inventory, its value often becomes apparent only when a crisis occurs.
A supply chain may be driven by systems and processes.
But it is sustained by credibility.
AI can improve forecasting.
Analytics can optimize inventory.
ERP can improve visibility.
But trust remains the invisible infrastructure that enables supply chains to function when unexpected events occur.