Top 3 Ways To Improve Supply Chain Collaboration in 2024

The global pandemic revealed various weaknesses in supply chains. As the world tries to walk out of the pandemic, supply chain challenges continue to disrupt industries. According to the World Economic Forum, supply chain disruptions in the US, China, and Europe have started to rise again after a slight decline at the end of 2020.

McKinsey identifies collaboration and coordination across the vertical and horizontal supply chain as one of the key focuses and ways to overcome current and future supply chain challenges.

This article explores 3 ways supply chain managers can improve collaboration and coordination for a more stable and resilient future for the sector.

Encourage data sharing

In the current age, data has become important for the survival of any business. Even the supply chain of an SME generates and manages a large amount of data. Data-sharing is a fundamental element of strong supply chain collaboration since it provides end-to-end supply chain visibility. However, data-sharing in supply chains is challenging.

Almost every supply chain is multitiered. This means that there is an original equipment manufacturer (OEM) having a line of Tier 1 suppliers. The Tier 1 suppliers have their own suppliers which are Tier 2 suppliers, and so on. 

Usually, the visibility of the OEM does not go beyond the Tier 1 suppliers. This is because the Tier 1 suppliers are scared of being replaced and do not allow the OEM to connect or collaborate with the Tier 2 suppliers (See Figure 1). This limits the supply chain’s reach in a time of crisis.

A no-code supply chain platform can help improve collaboration across a supply chain. Find the right no-code supply chain software through our data-driven vendor comparison list.

Figure 1. A simple multitiered supply chain example

To overcome this challenge, supply chain managers can utilize digital solutions to expand their visibility and collaboration horizons. 

Leverage an integrated digital software

For example, a cloud-based integrated supplier network management software can help connect the OEM with the whole supply network and facilitate real-time data sharing.

However, prior to implementing such systems, supply chain managers must consider the digital capabilities of their suppliers and support them for digital alignment. 

Check out our data-driven lists of Supply Chain Business Networks and Supply Chain Visibility Software to find the solutions that best suit your business needs.

Leverage blockchain

Blockchain technology can also significantly help improve supply chain visibility, data-sharing, and collaboration. It can offer:

• A transparent platform for business transactions
• More trust across the supply chain
• Enhanced visibility in supplier data
• Enhanced collaboration with suppliers

To learn more about how blockchain technology is revolutionizing the world, check out these quick reads:

• Ultimate Guide to Blockchain: What it is, Benefits & Development
• Top Blockchain Best Practices to Consider
• Blockchain Case Studies from Different Industries
• Top Blockchain Applications & Use Cases

Manage your supplier network

Improving the supplier network is an important part of effective supply chain collaboration: 

Foster mutual understanding

One of the biggest issues that brought down many supply chains was a lack of collaboration and connection with their suppliers. The relationships with suppliers were mainly transactional, and suppliers had no flexibility. During the pandemic, when demand surged, many suppliers did not have the resources to deliver.

Now supply chain managers know that they need to strengthen and build relations with their suppliers to sustain long-term mutual growth. This growth is not possible without both parties understanding and aligning each other’s goals and objectives.

Be proactive

Suppliers and other partners are willing to collaborate with businesses with a resilient supply chain that is prepared for the worse. Supply chain managers should have a disaster plan for situations such as the Covid-19 pandemic. Integrating suppliers and even competitors is such a plan.

The following information can be shared to ensure a network-wide collaboration in a crisis situation:

• Forecasts
• Status of inventory
• Logistics information including schedules
• Order details

Sharing this information in a secure way can help suppliers and other business partners achieve strategic alignment.

As we see from recent events, many countries have initiated collaborative efforts to overcome supply chain issues by bringing companies together.

To learn more about how to strengthen and build supplier relationships, check out this quick read. 

Measure and improve

No effort is successful until its success is measured. To ensure successful collaboration, supply chain managers need to work together with their internal and external stakeholders to set relevant KPIs. This can give a tangible action plan for each party to focus on. Some relevant KPIs to measure the success of collaborative efforts are:

• Compliance with quality and regulatory standards
• Supply chain costs (e.g: shipping, procurement, components, subassemblies, etc.)
• Inventory turnover and lead-times
• On-time shipment

To learn more about which KPIs can help measure your overall supply chain performance, check out this comprehensive article.

KPMG explains the importance of supply chain KPIs:

Further reading

• Top 5 AI Use Cases for Supply Chain Optimization
• 5 Ways to Improve Supplier Relationship Management
• 3 Ways To Optimize Your Supply Chain
• Top 5 Technologies Improving Supply Chain Sustainability
• 7 Ways to Improve Your Supply Chain Sustainability

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