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Stephen DykePrincipal Solutions Consultant, FourKites

Whether it be cooperation between logistics service providers (LSPs) and shippers or co-opetition between two shippers, there’s often reluctance for stakeholders across the supply chain ecosystem to collaborate.

While shippers might be open to the idea, they want to strike a balance between improving operations through transparency and safeguarding their ability to pivot to other LSPs as market conditions change. But regardless of your role — whether you’re a shipper or LSP, Chief Supply Chain officer or Transportation Manager — the reasons you’re hesitant to collaborate likely fall into one or many of these buckets:

  1. Competitiveness. Logistics providers are still independent companies competing for business, even when working with the same manufacturers or retailers. There is a reluctance to share data or insights that may compromise their competitive advantage.
  2. Lack of trust. Collaborative relationships take time to build trust and alignment. Without that foundation, partners may be hesitant to share information or rely on others in the supply chain.
  3. Tech limitations. Disparate IT systems, data incompatibility, cybersecurity fears, and lack of tech-savvy can hamper collaboration, even when the desire exists. Overcoming these barriers takes investment and expertise.
  4. Siloed incentives. When supply chain partners have conflicting KPIs or narrow priorities only optimized for their organization, it creates less incentive to collaborate.

However, these concerns can be overcome, and they should not stop you from achieving the tangible value of collaborating. So, the first question to ask is: what are the financial benefits of collaboration?

Determine the Value of Collaboration

Ironically, calculating the potential ROI of collaboration is most effective if you collaborate with a leading technology provider that has the benchmark data, expertise and frameworks.

To start, clearly define success metrics — lead time, inventory turnover, demand forecast accuracy and supplier delivery performance are all good examples. By benchmarking these metrics before and after implementing new collaboration strategies or technologies, companies can translate operational gains into financial impact. For example, if lead times are reduced by three days, calculate the working capital improvement from faster cash conversion cycles. Or if inventory turnover increases by 10%, estimate the savings from reduced inventory holding costs.

It’s critical to continue monitoring these metrics over time to prove sustained impact. Periodically revisiting the benchmarks, recalculating cost savings, and highlighting new performance milestones maintain executive support for collaboration initiatives. And the data can reveal additional opportunities for improvement.

Evaluate Partners

With a clear vision of the desired outcomes and potential cost savings, it’s time to thoughtfully determine who can help you achieve these goals.

  • Assess Cultural Fit and Leadership. Before diving into capabilities, take time to evaluate organizational cultures, leadership styles, and determine if values are aligned. Consensus-builders who prioritize transparency are ideal partners. Ensure leadership communication styles are compatible.
  • Validate Capabilities and Infrastructure. Go beyond surface-level capability checks. Conduct on-site process reviews, analyze performance data, and get references to confirm partners truly have the expertise and infrastructure to enable priorities. Don’t just take claims at face value.
  • Address Risk Management Upfront. Partners should openly discuss how they assess and mitigate various supply chain risks related to the collaboration opportunity. Review contingency plans, insurance policies, and crisis response processes.

Rather than assume that the largest players always provide the greatest value, optimal collaborations require an alignment of incentives between parties of comparable readiness and capability — regardless of sheer size or scale. 

Enable Communication and Decision Making with Visibility

Having the right supply chain visibility and planning technologies in place is important — when partners can access shared, real-time insights and predict potential disruptions, the entire collaboration process becomes seamless. Rather than relying on assumptions, guesses or manual workarounds, the ecosystem can pivot dynamically based on a unified version of the truth. This prevents delays, finger-pointing and disconnected responses.

For example, with unified visibility into inventory levels, demand signals, transit statuses and more, decision rights can be pushed out from centralized commanders to autonomous frontline players. When systems provide end-to-end visibility, retail store managers can dynamically adjust orders and react to local buying shifts.

Platforms like FourKites enable decentralized execution and the ability to globally optimize your supply chain. And the environment demands that suppliers, manufacturers, logistics providers, distributors and retailers all work symbiotically to rapidly adapt to rising customer expectations and market uncertainty. The economic incentives are aligned if parties can move beyond legacy distrust and information hoarding — the future landscape will reward those that use collaboration for competitive advantage rather than allow past conceptions to prevent progress.

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