In this follow-up to my last story I will discuss collaboration with the 3PL partners to improve your supply chain capabilities. The definition that I choose to focus on here is ‘developing a mutually beneficial partnership through a robust two-way sharing of information, methods, research and industry best practices’. In this discussion I will ignore the definition of collaboration that focuses on integration of the partners’ networks. I choose to ignore this aspect because I believe that when you focus on a two-way open and sharing community, the network integration is a foundational requirement! In addition, network integration is moving more towards a commodity type of service and shortly will become the price of admission to the market.
As an interesting aside relating to the network integration commodity concept I am seeing an increase in publications related to the concept and practice of ‘integration-as-a-service’. Logistics technology service providers like Descartes are extending and enhancing their capabilities in B2B integration through acquisitions of integration network service providers. In an earlier post I mentioned the concept of these logistics and 3PL service providers extending their services to provide more pervasive services and capabilities through building out their partner network integration. This enhances their offering and services along with their partners’ abilities through the secured and extended partner integration in a community. In other words, the more partners that connect into the ‘integration-as-a-service’ technology service providers, the easier the partner community can collaborate within the community. The ‘integration-as-a-service’ technology provider ensures the availability and the security of the integration network as a foundation and their partner community reaps the benefits!
Now, in order for the community to reach the next level of maturity they must extend their collaboration into developing a mutually beneficial partnership through a robust, two-way sharing of information, methods, research and industry best practices. This collaboration practice will be encouraged and improved with the growth of the community, in other words, the larger the community, the greater the benefits to the community as a whole that this collaboration will provide.
This will require a dramatic shift in the concept of ‘proprietary’ information in order to gain the greatest benefits for the community. This will be a challenge for many but it is not without precedent. It was not too long ago that the concept of vendor managed inventory was unheard of and in fact, was viewed as a major threat to the viability and success of an organization. Then something interesting happened; and a major retailer to change their definition of ‘proprietary informaiton’ and opened the sharing of sales and product forecasts and the rest, as they say, is history. Now, vendor managed inventory is viewed as an industry best practice!
I don’t think I’m going out on a limb here when I predict that the integration-as-a-service especially in the logistics industry will drive an explosion in the levels and types of collaboration in their communities. This explosion in collaboration will also create a second explosion of increased value to the members of the community that embrace these increased levels of collaboration. In addition, as the security of the network is developed, the levels of collaboration will naturally extend and the community membership will also explode.
This will bring us to a new age of supply chain outsourcing capabilities and value!
My next posts will focus on the second factor to developing a successful partnership.
Now for the audience participation portion of this program……
How would you define your relationship with the Third Party Logistics Provider? Is it a traditional customer / vendor relationship that focuses on one-sided benefits and short term objectives? Or, is it based on a partnership that provides mutually beneficial benefits and long term objectives?
Do you see organizational benefits and opportunities to improve based on the partnership relationships that I describe above?
If you see the benefits to this type of relationship, will you be taking steps to implement this type of relationship?
Would you say that your focus is long term and strategic, or short term and tactical?