Collaboration: Key to Supply Chain Success

July 12, 2013
Categories: Global Supply Chains

SCM World’s Kevin O’Marah recently shared insights from the SCM World Leaders Forum in Gleneagles, Scotland, which was attended by senior executives from large global companies such as Nike, Coca-Cola, BAE Systems, Walgreens, and Teva Pharmaceuticals. He summarizes a couple key points from the summit: “collaboration accelerates learning” and “supply chain leaders learn from each other.”

O’Marah highlights the remarks of the CEO of the Swedish company SKF, who emphasizes collaboration with suppliers by reinforcing the importance of “deep, trusting and collaborative relationships with suppliers.” He describes the efforts by SKF and one of its key suppliers to engage each other and determine how they can create value for their entire supply chain. Joint value creation can yield benefits beyond the tangible margin increases. When companies share best practices, at a minimum with their suppliers, this information-sharing encourages implementation of those practices across industries.

A Wall Street Journal article by Deloitte from June 27, 2013 discusses the importance of understanding the true impact of supplier and business partner relationships. It is widely acknowledged that companies should have procedures for protecting digital information; however, companies can often fail to recognize that their suppliers also conduct business with other suppliers. For this reason, supply chain control mechanisms must be in place and shared with suppliers so that companies can be confident that their proprietary materials or products are being protected across all business relationships. advocates for supply chain collaboration so that businesses may reap not only the financial benefits of being proactive rather than engaging in damage control, but also of reducing many of the risks that can be associated with loose supply chain management including: counterfeit components and products, theft of intellectual property (IP), and liability for corrupt business practices.

Once companies establish internal mechanisms for protecting IP and preventing corruption, it is imperative that they work with their supply chain and business partners to ensure that these responsible practices permeate the entire supply chain to protect their reputation and potentially enhance their bottom line.

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