The Tangibles and Intangibles of Supply Chain Collaboration - Supply Chain Management Blog -
The Tangibles and Intangibles of Supply Chain Collaboration

The latest recession has gotten a profound impact on many supply chains and forced rethinking strategies. In a quest to reducing costs, many have diminished safety buffers, established lean thinking, and redesigned their flows. In that process they have made themselves more vulnerable to variance, while their objective is to maximize sales. Doing so implies a much closer relationship with ecosystems partners. Cross Supply Chain collaboration is critical to gain visibility, address issues early and improve agility.

Many "Recession Survival Kits" are out there, and although they will add value and improve the situation, we should not forget the simple communication & collaboration aspects. It is when people talk, share information and experience, and jointly come up with solutions, that problems are resolved.

What is needed to build a culture of collaboration throughout an ecosystem. Obviously, there are technologies out there that facilitate the sharing of information, the interaction and the visibility. Private and public hubs, unified communication, supply chain visibility, are all tools that can be used to develop supply chain communication and collaboration. NiST, in its definition of Cloud, introduces the concept of Community Cloud. This is probably the next technology that addresses ecosystem collaboration.

But my point today is not so much on the technologies to be used, but rather on the intangibles that need to be in place to foster the collaboration. I'd like to highlight following elements:

  • Building Collaborative Relations. It may sound obvious, but there must first be a willingness to collaborate. In the late 20th century, the principle of squeezing suppliers to the last nickel has been promoted and presented as the only way business could be done. Such approach has benefited some companies and pushed many of them to bankruptcy. As a side effect it has inhibited collaboration amongst suppliers and customers, as there was a fear that any information shared would be used to squeeze a little more. So, changing the paradigm and approaching the supplier relationship from a more collaborative angle is mandatory for developing the visibility, communication and collaboration required. Procurement departments may have to adjust to such approaches and move to collaborative sourcing, but they should do so, as it will help the ecosystem becoming more responsive at a lower price point.
  • Trust. Sharing information, collaborating, adding value to the community, requires trust to be developed amongst the partners. According to the definition provided by the Merriam-Webster's Online Dictionary, trust is the assured reliance on the character, ability, strength or truth of someone or something, one in which confidence is placed. This very much corresponds to the trust that needs to exist between partners in the supply chain. They need to be willing to hear the bad news, to have confidence in each other, to understand that they both will act for the common good etc. Building such trust between ecosystem partners takes time. This is why I would advocate it can only be established with a small amount of partners.
  • Win-Win. This is an overused term, but the essence of it is critical. If the partners do not have the impression they all win from working more closely together, they will not pursue the relationship. It is often counter intuitive for companies to think about how a particular action may benefit their supplier. They are in business to make money, isn't it? But helping the partner and ensuring he also gains benefits, has demonstrated over and over again as a wining proposition in the long run. Despite the fact Wall Street pushes us to focus on this quarter's revenues, looking at long term benefits, ensures the viability of the enterprise. And this should never be forgotten.

 When looking at implementing communication & collaboration tools along the supply chain, the above 4 aspects should never been forgotten. The technology is there, but alone will not provide full advantage. Combining technology and the more intangible aspects are critical to gain full return from a unified communications & collaboration project.


Posted 11-02-2009 11:38 AM by christianverstraete

Comments

Nick Parnaby wrote re: The Tangibles and Intangibles of Supply Chain Collaboration
on 11-03-2009 5:24 AM

Very enlightening post.  We are focused on "Community Cloud" based solutions for the communication and collaboration aspects.  However, without the intangibles you point out there is no need for them.  It's very interesting from my perspective to see the stark differences in how different industry verticals have addressed the intangibles.  In discrete manufacturing and aerospace I have seen these address far more than in industries such as Retail and Distribution/Wholesale, where there is more "arms length" activity.  

Cheers

Nick Parnaby (Founder & COO, RollStream Inc)

Sneha wrote re: The Tangibles and Intangibles of Supply Chain Collaboration
on 11-03-2009 11:37 AM

The problem with the folks like Google & Yahoo is that they have created many tools which have been loosely coupled. The challenge with such a solution is that the the information gets locked into multiple silos. With Google Wave they are trying to integrate all the conversations (discussions) but what would be truly desirable is a platform built form ground up using social networking at the base and business apps on top of it. I have tried Injoos Teamware (www.injoos.com) and found it captures both informal and formal knowledge like documents in one single workspace on the cloud.

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