Collaboration with business partners can yield significant benefits including increased supply assurance, reduction in latency and lower inventory levels, faster product innovation cycles, increased flexibility to respond to change and increased revenue.
While the results can be dramatic, not all attempts to foster collaborative relationships have been successful. The following is a brief checklist of practices that will help improve the success rate and maximize the value of investments in this area for all participants.
- Focus on people, process and technology – all three are required for success.
- Segment your suppliers based on measures important to your business and develop targeted strategy & approaches for each, e.g. one size does not fit all.
- Segment materials based on key attributes such as cost, MTS/MTO/ETO, volume, constrained vs. unconstrained, demand volatility, etc. and develop deployment strategies to accelerate/maximize value.
- Both parties must derive benefits from the relationship – establish scheme for sharing captured value.
- All key stakeholders should be involved in the design of the solution – incorporate supplier needs into the solution.
- Executive support and active participation is critical.
- Establish metrics & benchmarks for project – track regularly and make results highly visible.
- Involve actual users in creation of user documentation & on-line help.
- Relationships change over time as trust develops – start slow and evolve solutions to capture incremental value as relationships mature.
- Requirements will constantly change – find a solution that is flexible to accommodate change as fast as the business requires.
- Establish a continuous improvement program – reward significant/break-though contributions.
- Consider establishing a user group that meets at least annually – this will help keep a focus on continuous improvement and help foster positive relationships that can drive more value added collaboration.
- Make sure there is a proper governance model in place.
- Recognize that different suppliers have different levels of technical expertise – provide integration methods that accommodate different levels of IT competence.