As businesses of all sizes search for ways to help reduce supply chain costs, new and innovative options become common practice. Just a few years ago businesses saw their supply chain as uniquely their own, but this limited the options to cut costs and to boost efficiency.
This was largely due to the nature of the supply chain. This includes the raw material coming in as well as the suppliers, manufacturers, outlets, distribution hubs and all other transfers of inventory, materials and finished products throughout the system. Without a clear, precise and efficient plan, it is easy to see how inefficiencies and unnecessary costs can occur, particularly when each part of the supply chain is seen as an independent entity.
The Benefit of Collaboration
Now, imagine the differences that would occur if supply chain collaboration was in place. This is the interaction and sharing of data and information between the parts of the supply chain and often including other businesses using the same supply chain or logistics plan.
This is a technology component that allows shared real-time data between companies and entities that will mutually benefit from this exchange. Think of it as a way for smaller businesses to work together to have higher supply chain demands. These increased demands lower the price for the service but also provides larger orders and shipments for suppliers of the raw materials as well as shippers of the final products.
Making the Move
While supply chain collaboration will rely on customized software to provide transparency throughout the logistics plan, it will be important to have a discussion and work with other companies, suppliers and manufacturers before choosing the software package.
Having a firm buy-in from the various vendors and suppliers in the supply chain as well as the companies that will be partners in the venture is critical. Once in place, supply chain collaboration will be highly effective for all involved, but it all starts with early discussions and mutual planning as to the best software system to consider.
