Is Supply Chain Collaboration Truly Workable

In the highly volatile business environment that exists today, concepts that lead to enhanced corporate profits continue to evolve. With demands to keep supply costs low clashing with the need to provide product virtually overnight, cooperative techniques are an absolute necessity. The current buzzword for that cooperative effort is supply chain collaboration. The term itself implies a high level of peer to peer cooperation at all points along the supply chain. The question then becomes, how does that level of cooperation develop?

Traditionally, cooperation between the various levels in the supply chain has been minimal. Secrecy was deemed an essential element in maximizing the profit potential for each link in the chain. However, efficiency suffered greatly when sincere cooperative efforts did not exist. Ergo, supply chain collaboration can not succeed without a high level of trust and cooperation between all members of the chain. The logical conclusion is that success of the collaborative efforts requires a corporate cultural shift.

The generations of corporate culture demanding secrecy and independent action to maximize profits simply does not work when dealing with supply chain collaboration processes. While there is no denying the need for each link in the chain to create profits for shareholders, the realization that those profits can be increased through cooperative inter-corporate relationships is a new paradigm for management to explore. The implication is that all levels of management must buy into the concept. In addition, a trust relationship must be established with the trading partners cooperating in the collaborative efforts.

Trust is not always easily established. In some circumstances, relationships are workable from the onset. In other cases, outside assistance may be required to make supply chain collaboration function profitably. There are numerous reasons for relationship difficulties to exist. In cases where the traditional competitive forces created distrust or where personal conflicts exist between individuals involved in the chain, the use of outside consultants may be beneficial.

Of course, all trading partners must share common goals. In other words, if one partner in the chain does not fully cooperate with the overall vision, difficulties will almost certainly develop. Utilizing an outside consultant to mediate issues may work to lessen differences. In some cases, systemic designs may need adjustment to ensure that all parties understand the win-win goals of the relationships. Once the parties grasp the potential for increased corporate value, the true potential for the collaborative efforts can be realized. The resulting relationships, even when moderated by outside consultants, can truly result in improved profits for all participants in supply chain collaboration.