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Powerful Benefits of Supply Chain Collaboration

The benefits of supply chain collaboration mirror the benefits of customer retention: long-term relationships ultimately lead to higher profits.

This happens, among other reasons, because after spending enough time collaborating and understanding each other, business partners become better able to harmonise quality production and ethical working standards across their supply chains. Furthermore, a better working relationship with your peers and buyers helps you optimise production, reducing wasted effort, time, and money.

In this article, we will explain what supply chain collaboration is, and outline four powerful benefits it could bring to your business.

What is Supply Chain Collaboration?

Supply chain collaboration, a practice growing in popularity, is exactly what it sounds like: autonomous businesses working together to improve operations in their supply chain.

There are two main types of supply chain collaboration: horizontal and vertical.

  • Vertical collaboration brings two or more businesses from different stages in the supply chain together, increasing productivity and performance: for example, a buyer forming a long-term relationship with one or several suppliers of their product and/or components.
  • Horizontal collaboration allows organizations at the same stage of the supply chain to share the burden of demand and optimise costs: for example, multiple manufacturers choosing to share the delivery infrastructure of their raw materials.

While the benefits of supply chain collaboration are many, you need to be clear on your goals before you approach other businesses about forming a partnership. This will not only help you set the specific parameters of your cooperation, but also will enable you to be upfront with your potential partners about exactly what you’re looking to get out of the collaboration, thus keeping everyone on the same page and fostering an atmosphere of trust.

Your goals in supply chain collaboration may be:

  • Improved communication about the state and challenges of your industry.
  • Collaborative execution or jointly improving supply chain performance by continuously solving problems with better information.
  • Accumulating and maintaining a larger body of data that can be analysed for trends and actionable insights.
  • Information sharing on best practices, stakeholder performance and emerging issues.
  • Resource sharing to optimise operations (i.e., by coordinating warehouse capacity and delivery schedules).
  • Industry-wide transformation, including by driving better standards for quality, sustainability, and human rights.

As the popularity of supply chain collaboration is growing exponentially, there emerge new and innovative ways to make every aspect of it more efficient. Cloud-based software plays an important part here, as it can bring suppliers, vendors, warehousers–and even companies with common business interests–under one digital roof.

Powerful Benefits of Supply Chain Collaboration

Both horizontal and vertical supply chain collaboration can bring your business powerful benefits, many of which are further enhanced by utilizing an end-to-end shared digital platform to manage your sourcing and supply chain efforts. These include:

1. Supply Chain Talent and Partner Retention

Businesses today understand the value of customer retention, as well as the level of competition vying for brand loyalty. However, customers aren’t the only thing your business needs to succeed. You need to ensure that your company attracts and retains top employee talent, and maintains long-term partnerships with the best players.

Indeed, according to The Global Supply Chain Institute, “supply chain talent management is arguably the most difficult and unique of all business requirements.”

And retaining talented supply chain managers and partners is one of the farthest-reaching rewards of supply chain collaboration efforts.

By using a professional digital platform to manage your supply chain operations, you give your supply chain managers top-tier tools to do their job, allowing them to not only contribute to your success, but hone their professional skills, develop their careers, and boost job satisfaction.

Meanwhile, when you can offer your suppliers and partners a unified platform to collaborate on daily QC matters, complex market regulations, as well as transparent ethical standards, you are demonstrating your business’s professionalism and dedication to efficiency, showing your most valued SC partners that cooperation with your brand is an opportunity for them to raise their profile and generate more business.

The best supply chain talent and the best supply chain partners will undoubtedly want to work long-term with a business that can deliver this level of competence.

2. Lower Your Long-Term Costs

One-off partnerships have their time and place in any operation: however, it’s the long-term collaborations that have the most impact on your bottom line.

The benefits of long-term supply chain collaboration are practical, straightforward and felt on a day-to-day basis. Simply put, the longer you collaborate with anyone, the better you are at understanding each other’s strengths, weaknesses and working methods — and the better you both are at playing to each other’s strengths.

For example, by keeping a supplier in your supply chain in the long term, you benefit from collaborative experience and streamlined communication, and forgo the extra time and costs used to repeatedly learn a new supplier’s operation, standards and habits. When you are familiar with your suppliers’ pace, management processes and other operational specifics, you can close costly production cycle gaps more quickly and easily.

With professional quality control and compliance software, it is so much easier to ensure real-time communication and mutual transparency with your long-term suppliers–as well as optimise and automate routine procedures, saving all parties valuable time. For instance, a digital quality control platform can allow you to automate QC inspection assignments based on all parties’ schedules, as well as inspector availability, specialisation and testing requirement, so that the quality checks are conducted by the best-suited inspectors, dispatched at the best time, and armed with detailed guidelines to follow.

3. Improve Product Quality and Safety

Delivering safe, high-quality products is key to customer satisfaction and therefore, something every brand and retailer aspires to. Collaborating with a supply chain partner gives you an extra perspective on the challenges facing product quality and safety in your industry, be they raw material issues, new regulations on chemical management, or more.

Furthermore, working together with your collaborators to overcome these challenges produces results more quickly and efficiently than each party trying to do it alone. Ultimately, your consumers, your business, and the entire industry will benefit.

Collaborating in the scope of a shared digital platform that captures, consolidates and analyses quality and compliance data from every point of the manufacturing process gives you and your partners a 360-degree view of the sourcing operations you’re involved in. With actionable insights on hand, you can track quality and safety issues to their source and address their underlying cases with high-precision interventions and corrective actions.

4. Drive Better Ethical Standards Through Multi-Stakeholder Collaboration

Ethical and sustainable sourcing is increasingly a high priority for consumers and businesses alike. But no matter how passionate you may be about improving the state of human rights and environmental sustainability in your industry, one company can only do so much.

Indeed, it is universally agreed that multi-stakeholder collaboration is paramount for driving meaningful and lasting change through global supply chains. Collaborating with a supply chain partner allows you to work together towards greater supply chain transparency, promote higher ethical and environmental standards, and exert better leverage over parts of your supply chain that are resistant to positive change.

Moreover, when you and your supply chain collaborators can join efforts within the scope of a single digital platform, you can share ethical compliance data quickly and efficiently, coordinate audit schedules, and, if you use compatible ethical compliance protocols, even rely on each other’s findings to avoid duplicate auditing and reduce auditing fatigue on your suppliers.

Source: QIMAone


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