I might be kicking in an open door when I say that Supplier Collaboration is a key component in many Supply Chain Management projects, but on the other hand it is ooh so true.

Over the years we have gone through the well-known hype cycle for Supply Chain Management and, related to that, have seen the rise and fall and rise again of Control Tower Platforms (CTP's). Going through a hype cycle is not bad at all and actually a natural process for new concepts, because it just creates the necessary time to grow from idea to a mature and implementable concept and in the meantime create the required supporting environments. These environments are not only hardware (computer power) focused, but also concentrates on connectivity for electronic data exchange. 

One other very important thing however, depending of course on the type of your supply chain, is the maturity of the partners in the supply chain. Sometimes it just seems like raising children: you have to spend quite some effort in bringing your partners up to the level that you would like to see them operate as a fully trustable link in your supply chain. It is crucial that suppliers act the way you expect them to do, but you have to ask yourself the question how they can act in the most ideal and optimal way for you. They have many other customers to take care of and just being 100% dedicated to your processes is not always what you can expect from them. So how can you get them to act as if you were the only important customer to them?

Describing the mutual desired behaviour in Purchasing Contracts or Service Level Agreements (SLAs) or Logistical Contracts (LCs) is certainly a way to arrange it, but it still does not feel as a natural foundation for optimal cooperation. Of course it is good to be able to benchmark behaviour and actuals against agreed thresholds, but that still is not the same as a supplier that behaves like a fully autonomous integrated part of the supply chain or perhaps better said like a 'natural cell of a living organism'. 

Another well-known concept is to reward your suppliers for the desired behaviour with certain incentives. However, there might be a number of things that can stimulate and generate more synergy in the supply chain when starting a supply chain project. A 'give to get' approach can work from a financial point of view, but the approach must be from a positive way of thinking rather than a negative. And certainly not from a 'if you do not perform to the contract we will penalize you' point of thinking. Why not give them an easy way to quickly get the money for their service (whatever this may be) by assuring that they can do a great performance and give you also the related info required to make that money available? And let me assure one thing: with a good supply chain collaboration system it is not that difficult at all!

A simple 'give to get' example we are familiar with for years is electronic invoicing triggered by the supplier. After shipping your purchased materials at the right time, in the desired quantity and quality to the correct receiving location, in the agreed type of packaging and with all required documents. Quite some 'parameters' here for success, but is it really difficult to get this done from your Supply Chain Management system?

If you want an answer on this last question, just give me a call!

Give to get

SCM

Supplier Collaboration

Supply Chain Management