Supply chain collaboration could be a missed opportunity

on Wednesday, January 2, 2013

Supply chain collaboration could be a missed opportunity While some companies work closely with their partners to ensure supply chain optimization and efficiency, many others fail to do so and miss out on potentially profitable partnerships and cost reduction strategies.

With proper collaboration techniques implemented, a company can enjoy a shorter time in which its goods can be carried to market and increase business efficiency and consumer satisfaction. Such strategies can also reduce costs, as a company may be able to increase the optimization of its logistics, do away with some of its warehouses or ensure merchandise with a short shelf-life, such as electronics, are brought to market quickly and don't become obsolete or need to be sold deeply discounted.

This can also assist with problem solving, as companies have an additional partner to help them resolve any lingering supply chain issues that can cause problems and inefficiencies that can lead to diminished productivity or profits, especially for companies whose operations span an enormous region.

Some not taking advantage
According to a recent article in Supply Chain Digital, many firms in the retail industry are missing out on collaborative attempts that could save them costs and frustration. Even well-intentioned collaboration efforts can go astray if one partner insists on retaining too much control over a certain aspect, something that greatly hinder cost savings strategies. Supply Chain Digital reported that even seemingly smooth collaboration efforts can fall apart if one partner develops a mistrust of the other or fails to communicate its expectations or plans effectively.

Companies can begin the collaboration process by working with suppliers they value and have developed strong business relationships with, as working with too many partners at once has the potential to become counterproductive or confuse efforts to streamline a supply chain. Both partners should also agree in advance on how to divide benefits from the efforts, especially if an agreement requires more work from one of the parties.

However, those who try to engage in too much supplier collaboration could also see limited results, as in excess, partnerships can be counter-effective. If a company has no history of working with others or knowledge of how such agreements work, it shouldn't leap into the supply chain collaboration pool too quickly. Rather, it may be more effective and helpful for such a firm to begin implementing pilot programs to test different strategies and keep up those that work well.

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