What Is Supply Chain Collaboration?
Supply chain collaboration is when two or more businesses work together to meet shared objectives. Often, these objectives will focus on achieving objectives such as cost reduction, improved customer service or optimized supply chain performance — and doing so more efficiently than either group could alone.
Because of how interconnected supply chain organizations are today, collaboration initiatives could also take place among internal departments within the same organization. Especially as new technologies continue to emerge, opportunities for collaboration among previously siloed groups and organizations are only becoming more common.
We say all the time that logistics is a team sport. Indeed, the supply chain is already a highly collaborative industry, with vendors, suppliers, procurement and other logistics partners all working together to transport products of all shapes and varieties into the hands of those who need them. But this doesn’t mean that companies are collaborating at anywhere near peak efficiency.
Why Is Supply Chain Collaboration Important?
Over the past several decades, as corporations expanded to include vast supply and demand networks across entire continents, decentralization was necessary to keep things running smoothly. With the limitations in the technology that was available at the time, there was no way a centralized team could be responsible for such sprawling systems.
Instead, many companies split their operations among semi-autonomous regional headquarters and distribution centers, each one capable of planning, executing and controlling the flow of freight with minimal supervision. Though effective and resilient, these systems were also incredibly inefficient, relying on redundant processes and teams responsible for completing identical tasks virtually in parallel.
With the rise of advanced technologies specializing in enhanced communications, planning, visibility and more, smaller teams can now carry out the same responsibilities from a single, global control tower. This, in turn, allows for more effective collaboration among once-siloed departments and internal organizations, as well as with partners, suppliers and customers more broadly throughout the supply chain.
How to Improve Supply Chain Collaboration
One of the greatest barriers to effective collaboration is poor communication. Because of how decentralized the logistics industry was for so long, many organizations have developed proprietary workflows, processes and systems that are largely unknown and unintelligible to those outside the organization or department. To fix this, companies must implement dedicated, shared systems on which they can efficiently communicate with partners and outside stakeholders.
Data is also critical to any effective collaboration. For organizations of all shapes and sizes, good data is the foundation of strong decision-making. It facilitates efficient performance not only among individual team members but across entire organizations, as well. Without good data, the best anyone can do is make educated guesses. In today’s fast-paced business landscape, this is no longer acceptable if you wish to achieve success.
Five Steps to Successful Supply Chain Collaboration
Overcoming barriers to effective collaboration requires a sustained effort on the part of both management and the workforce at large. There is no silver bullet to successful supply chain collaboration, however the following recommendations represent a strong first step on the road to reaping the benefits of improved collaboration for your business.
Identify opportunities for collaboration within your existing network: You are already actively collaborating with your vendors, suppliers, customers and transportation partners. Finding new opportunities to do so more efficiently can improve customer satisfaction, operational efficiency, operating costs and more. Treat every partner as an opportunity for collaboration and improvement.
Break down data siloes: Many attempts at supply chain collaboration are plagued by siloed data, incompatible systems and informal processes that were never fully documented. The first step to fixing this is by centralizing that data into a single system, which can be accessed easily by team members throughout the organization. This removes both technical incompatibilities and cross-functional dependencies, allowing all internal stakeholders to operate more autonomously and efficiently.
Expand your search to include those outside your network: Just because two companies exist in competition doesn’t mean their supply chains have to, as well. In fact, there’s much to be gained when companies within the same industry engage in collaborative logistics, such as reducing dwell to improve available capacity throughout the industry.
Implement tools that aid in collaboration: Microsoft Excel may still be the most widely used TMS, but spreadsheets alone don’t cut it anymore. If you want to get ahead, you need to seek out tools and technologies that streamline outdated processes and eliminate all but the most necessary steps in a given process. For example, implementing a single source for digital document transfer can boost not only efficiency, but safety as well.
Seek out communities: Many innovative new ideas are borne over cocktails or coffee at industry conferences and get-togethers. Professional communities like this offer a change of scenery, a fresh take and new perspectives to bounce ideas off of. In fact, Land O’Lakes’ innovative partnership with Coca-Cola to reduce empty miles began as an offhand conversation at an industry event. (And keep in mind that just because in-person events aren’t happening anymore doesn’t mean that you can’t still connect with people virtually and form a community that way.)
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The old days of “my supply chain” and “your supply chain” are gone for good. Today, effective collaboration both within and among organizations is the only path to success in maximizing profits, eliminating waste and promoting sustainability.
As with many things in the world of modern business, good data is the starting point for any successful collaboration initiative. FourKites is the leading provider of supply chain visibility software, which allows enhanced collaboration among some of the world’s biggest shippers, carriers, brokers and 3PLs. If your goal is to identify blind spots, strengthen communications and maximize the impact of collaboration in your supply chain and beyond, then you’ve come to the right place.