I have identified 3 key types of collaboration, or, 3 key functional areas within the supply chain that have been the focus of collaboration efforts. These three areas are:
- Partner or Supplier collaboration and integration
- Intra-business organization, or the integration and collaboration across the key business functions like finance and supply chain, or operations, for instance
- Intra-operational within the supply chain, or the collaboration and integration across the supply chain functionality like receiving, or inventory control, or shipping.
I’ve listed these areas by what I consider to be their priority sequence and also their business value sequence. In other words, the partner collaboration and interaction requirements and capabilities are the highest priority and the successful collaboration and integration in this area will provide the greatest value to an enterprise. The value is provided by a reduction in manual and exception handling along with increased delivery success that would also provide reduced inventory requirements. The second type of collaboration referenced above, intra-business organization promotes collaboration and communication across the business functions and while the benefits are similar to the partner integration, the value of these benefits are less. The third type of collaboration reference above, intra-operational within the supply chain organization promotes collaboration across the functional areas within the supply chain and the benefits of this type of collaboration would most likely be the least of the three.
The collaboration and communication framework encourages and develops cultural benefits like increased partnership and ‘community’ relationship development. These cultural benefits lay a foundation for increased collaboration and efficiencies within the three types, or functional areas, within the supply chain. This framework increases the trust factor and encourages mutually beneficial objectives. (This can be at odds with the more historical partner/supplier relationships which could sometimes be considered as antagonistic relationships and require additional effort to achieve the trust.) This open communication and collaboration encouraged by the community relationship allows the members of the community to improve their ability to adjust to the challenges regularly encountered as a result of the extended supply chains currently in place.
The means to implement the communication and collaboration have a common life-cycle, they start manually (comparable to the ancient ‘sneaker network’) and as the collaboration requirements are defined and refined they can be automated with the goal of achieving an objective based and strategic implementation framework. Previously, in a traditional IT centric integration framework, these integration methods could be very cumbersome and costly. However, now the introduction of cloud services holds the promise of reducing the complexity and cost of integration through the implementation of standard services provided by a third-party. The down-side, or strategic challenge, to the utilization of cloud services is an increase in complexity and risk if the services are not selected and implemented in a careful manner. These risks are similar to the ‘best of breed’ software selection model where the disparate services must also be evaluated based on the ability and ease of integration into the enterprise framework.
I believe this is a key ‘test’ coming from the capabilities and promise of cloud services that could bring a major upheaval to the SCM collaboration and communication framework. As I mention in an earlier article (https://community.kinaxis.com/blogs/TBrouillette/2011/06/29/the-perfect-storm--the-legacy-applications-landscape) the potential for upheaval will be similar to the introduction of the ‘office’ software package. Our test in technology is how we will handle the integration, collaboration and communication challenges, and promise of benefits, provided by cloud services. This upheaval will also drive initiatives to increase the maturity level of both the SCM software packages and the capabilities and practices of the customers implementing the software and cloud services.
Now for the audience participation portion of this program……
What is your experience with the benefits, risks and costs of collaboration and communication?
Have you seen a progression of maturity?
How do you see the cloud services impacting the successful implementation of these capabilities?
Do you agree with my points on the importance of developing a community?
What hurdles and challenges have you encountered in implementing your collaboration and communication initiative?