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How to Improve Supply Chain Collaboration

Supply chain collaboration is the way of the future. The combination of the COVID-19 pandemic, the global supply chain, and all of the industry’s weaknesses has been a major focus of the public. 

A number of products, ranging from computer chips to toilet paper and everything in between, are sparse. Faced with sourcing issues, flakey suppliers and unknown delays, businesses are having to rethink the model of effective supply chain management. 

Collaboration within industries and between suppliers can lead to greater business efficiency, reduced costs, and overall business growth. Here’s what you should know about supply chain collaborations. 

What Are Supply Chain Collaborators? 

In supply chain management, supply chain collaborators are two or more autonomous firms working together in the planning and execution of a supply chain. These can be competitors within the same industry or a supplier and their client. 

Supply chain collaborators transparently work together to share business processes, anticipated supply chain delays, and other key information to facilitate a seamless supply chain. As partners, these collaborators work together to optimize the flow of operations in the supply chain to efficiently meet the demands of end customers when it comes to on-time delivery. 

What Are the Challenges?

The primary challenge of supply chain collaboration is the obscure practices and information on part of businesses. It requires transparency, and collaborators must share the same goals. Outdated systems, organizational isolation, and a culture or mindset of protecting business-related interests are also major obstacles to the success of a collaboration. 

Why Is Collaboration Important?

Supply chain collaboration is important because it increases efficiency across industries. It can lead to increased profits and sustained growth for all collaborators, while also eliminating waste and improving sustainability. 

Ultimately collaboration reduces redundancy and autonomy within supply chain centers, benefitting everyone involved.  

5 Steps to Achieving Successful Supply Chain Collaborations

Like so many aspects of business, achieving successful collaboration is about gradual steps. A consistent cultural shift will lead to long term results. Here are five steps to get started. 

Step 1: Identify Opportunities within Your Existing Supply Chain Network

The first step of is finding new opportunities with current collaboration partners. This includes direct suppliers as well as tier two and tier three suppliers. 

Since you are already actively collaborating with transportation partners, vendors, suppliers and customers, the first place to start is with them. Reach out to all current network partners with the intent to transparently share goals for collaboration. 

Step 2: Simplify Data Communication

Enhancing communication is crucial. Supply chains rely on data, and companies have their unique data systems that may be unintelligible to outsiders. For these reasons, simplifying data communication between supply chain partners is the second most critical step to collaboration.

So, companies can create a central data system. Setting permissions can allow team members throughout the organization to see the same data. This would then remove communication barriers and increase transparency for more efficient decision-making. 

You can do this by bringing the product data, people, and business processes together into a secure, single source using advanced digital technologies, like cloud software. When you then enable real-time, controlled, supply chain collaborations, you’ll remove both barriers to entry and possible information bottlenecks. 

Step 3: Utilize Tools That Aid in Supply Chain Visibility and Collaboration

Communication and supply chain visibility goes beyond a central database. Using a TMS is important, but it needs to be combined with other tools and technologies in order to get ahead. Supply chain collaboration works best if you streamline outdated processes and eliminate all unnecessary steps in your supply chain. 

While Microsoft Excel is commonly used as a TMS, there are far more efficient tools and technologies that can optimize supply chain visibility and facilitate collaboration better than Excel could. 

Step 4: Establish and Analyze Key Performance Factors

Establishing the collaboration metrics of success is essential because it will allow you to monitor effective supply chain collaboration. Companies can work with both internal and external collaboration partners to establish key metrics of production and supply chain performance. This will also inform them of which metrics to prioritize. All of that will depend on the industry, current performance, and goals for growth.

The most common performance metrics include the following: 

  • Quality output
  • Regulatory compliance
  • Inventory availability
  • Inventory lead time 
  • Inventory turnover
  • Supply chain costs
  • Shipping times
  • On-time product delivery

Step 5: Seek Out Supply Chain Network Communities

Supply chain networking communities can lead to unexpected partnerships. Creating connections and building relationships can aid in and improve collaboration overall.

Companies across industries can benefit from supply chain collaboration and partnerships. Industry conferences, online communities, and virtual events are all valuable networking opportunities. 

Collaboration Is the Way of the Future

If cut-throat competition and supply chain isolation was the way of the past, supply chain collaboration is the way of the future. Its value extends to all supply chain partners, ultimately resulting in industry growth and improved customer experiences. 


How Can Supply Chain Collaboration Improve Performance and Support Business Continuity?

It can reduce delays, increase efficiency and lead to more on-time deliveries. Also, it enables businesses to predict supply chain bottlenecks and take appropriate action to ensure sufficient inventory and business growth.

Why Is Collaboration Important for a Successful Supply Chain?

Collaboration is important for a successful supply chain because it allows all partners to benefit from shared knowledge of processes, potential delays and current demand. By facilitating shared data and resources, it provides businesses with insight that is essential for growth.

How Can Collaboration Improve Supply Chain Challenges?

Collaboration can improve supply chain challenges because it allows partners to work together on everything, namely problem-solving matters. Shortages, bottlenecks and delays can be better handled with advanced warning and increased resources. When supply chain partners collaborate and share information in an efficient and transparent manner, more work gets done, and it’s done efficiently as well. Problem-solving can result in more information and better solutions. 

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