Exploring the Benefits of Supply Chain Collaboration

May 09, 2022
Supply Chain

The benefits are significant for organizations that can achieve optimal supply chain collaboration.

Credit: iStock/andresr

Many enterprises are struggling to deliver for customers because of a disruptive environment, internal silos, mismanaged data, the pandemic, and inefficient collaboration between companies, despite our increasingly digital world.

One study conducted by GEP in partnership with the Supply Chain Resource Cooperative at North Carolina State University (NCSU) found that misalignment between procurement and supply chain operations is hurting today’s businesses.

There’s an urgency to address these supply chain disruptions. Facing high inflation, rising customer expectations, and employees who demand flexibility and have more choice when it comes to where to work, companies must do everything they can to streamline processes and operations, supporting profitability and sustainability. To succeed, holistic supply chain collaboration is critical.

Holistic, multi-dimensional collaboration delivers the highest total value, considering cost, speed, risk, quality, and overall customer experience. It includes order collaboration, forecast, capacity, inventory, quality, and cost collaboration with suppliers.

“When we look at the root of the problem, the conclusion is that companies need to collaborate and connect,” says Alex Zhong, director of supply chain solutions at GEP. “Collaboration is critically important.”

Supply chain collaboration means companies and their suppliers are aligned with their strategies and goals even before working together. They’re seamlessly connected via infrastructure and enabled by the best, most efficient technology. Information is easily shared, and all parties are privy to the data they need to make the best decisions for all.

For organizations that manage to achieve optimal supply chain collaboration, the benefits are significant, and include:

  • Enhanced efficiency and cost savings. Collaboration eliminates waste in the system when enterprises anticipate issues ahead of time. The ordering process is smoother because companies have the data they need to make the best decisions and avoid delays.

    Ships, for example, can be more efficiently re-routed in the case of a major backlog, preserving products. Likewise, better collaboration could have helped with last year’s logjam of vessels in the Suez Canal, where hundreds of ships were stuck and delayed after a cargo ship ran aground, or in the Port of Long Beach in California, where a backlog of vessels has persisted. “By collaborating, we eliminate misalignment and disconnects, acting in the same direction and rhythm, so systematically we have the lowest cost,” Zhong says.
  • Better risk management and control. With a holistic approach to collaboration, companies build supply chain resiliency. They have shared data to better plan and run operations. For example, an enterprise that’s aware of a product’s delivery well ahead of time can ensure there’s ample space in their warehouse to receive it. Companies better forecast ordering and sourcing to ensure they have just the right amount of inventory on hand. They benefit from capacity collaboration—having the data they need to know precisely when to prepare, open and close production lines. “Optimized inventory management is super important in an inflationary environment,” adds Zhong.
  • Greater opportunities for innovation. When organizations collaborate and share more information and resources, it opens avenues for greater innovation and new products, services and ways of operating, says Zhong. “We know the supplier is an important source for product innovation. But it’s not only the product, it’s also how you deliver the product,” he says. “How it’s delivered creates the customer experience. You get innovation from your logistic suppliers.” Trust is critical, and with enhanced supply chain collaboration, opportunities abound for enterprises to develop value-added innovation with their suppliers.

To get started, companies must first commit to collaborate. “Get started before you figure out everything because disruption will not wait for you,” Zhong says.

Companies then need to build a process, have support from the top, and find a tool that allows for real-time collaboration with supply chain partners, giving a holistic view of operations. The foundation should be a supply chain collaboration platform that runs capabilities such as AI and advanced analytics, and has connectivity and network capabilities.

“Find a future-proof technology solution, not just a one-off tool,” says Zhong. “More modern technology can help you shift quickly. Everyone wins when we all come together, look after each other and share information.”

At GEP, we help companies with transformative, holistic supply chain solutions so they can become more agile and resilient. Our end-to-end comprehensive, unified solutions harness technology to change organizations for the better.

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