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2012

Charlie Kantz is a successful Supply Chain executive with over 20 years experience.  Charlie has created a Collaborative Supply Chain with all vendors, factories, Freight Forwarders and carriers involved. According to Charlie ‘This Collaborative Supply Chain was able to help me reduce my cost per carton by $4.00 per carton (approx 20%) and reduced transit time by an average of 6 days (approx 15%) across the country. I was also able to have Visibility throughout my entire Supply Chain, so that I could react to market changes within the company and redirect goods while still intransit.’

I asked Charlie to provide some insights based on his experiences in developing a successful collaborative network.  Everyone discusses a ‘framework’ for collaboration and below  Charlie Kantz provides his viewpoints on the special needs of developing a framework in a collaborative network.

Charlie, can you describe your viewpoint for developing a collaborative framework?

 

If anybody has ever had Zoysia grass you know that it not only is very difficult to get get rid of but that it also takes over everything.  Zoysia grass grows above the ground along with below the ground, creeping and taking over every thing around it.  Your company’s Collaboration efforts should be similar to this.

 

Most people think that Collaboration is just outside of your company and deals with your vendors, carriers and customers, but it should go a lot deeper than that.  While you want to work with those people for them to not only be able to help you but you helping them also, you need to work inside your company also.

 

Zoysia grass grows over the ground.  This is similar to you working with your external customers, vendors, suppliers etc.  People can see this happening.  You go to a supplier and ask them to collaborate.  You work with them at fixing a specific problem. It gets fixed and you are operating better.  You have taken over that problem and are now working closer with that supplier. He might take what he learned from you and do it with another one of his customers. He has now expanded things above the ground just like the Zoysia grass.  It just keeps growing out and as it does it changes the way things look.

 

Zoysia grass grows under the ground.  This is similar to you working with your internal operations.  People don’t usually see this happening.  You work with your IT department to give you additional reports to allow you to have visibility.  This visibility helps you determine what you need to do to make changes to your operation, and therefore establishes a collaboration with your “over the ground” network.  Your IT department sees what they have done for you and then spreads it out to others within the organization, fostering that underground growth.  It then pops up above ground where the Merchant, Store Ops, Marketing are all working and collaborating with their suppliers, vendors, customers to make changes (above ground growth).

 

Once you get these things going, just like with Zoysia it is hard to stop the growing and taking over until all areas of your landscape are now covered with Zoysia.  Also, it is something that is hard to kill.  If you have somebody who does not want to work with you on making changes, you will not let that stop you.  This will allow you to change the companies you do business with, or that company might change to having a more cooperative person for you to work with.

 

The hardest thing about getting Collaboration and Zoysia growing is planting that first plug!

 

Now for the audience participation portion of this program……

 

What are your methods for developing a collaborative network to support your extended supply chain?

In this discussion I thought it would help to expand a bit on the development of a collaboration roadmap to chart out your direction and methods and procedures to meet your objectives.  We’ve discussed evaluating and defining the needs of your community, the partners that will make up the ‘citizens’ of your community and the focus on a continuous improvement, along with continuous expansion of your extended supply chain collaborative community.  One of the critical success factors for your community is the ability to define your roadmap to understand and plan for your direction along with how you will meet your objectives. 

 

The more time and thought you put into this process the greater the value you will realize from your extended supply chain community.  The roadmap provides the ‘guideposts’ that define the direction, the procedures and the methods that you will need to employ to meet your vision and objectives.  It provides the guideposts that will allow you to progress from Point A to Point B.  The roadmap is one of the most critical of critical success factors and its importance cannot be understated in a collaborative (or social) initiative because of the very nature of a collaborative community. The collaborative community is dependent on the actions of the members of the community and commitment of those members to the success of the community. 

 

The roadmap should be incorporated as a vital link in your evaluation and continuous improvement program.  The roadmap must be incorporated into your community and principals as a living document that will not only guide you in your journey to develop and implement your collaborative extended supply chain community; it will also provide the means to establish your framework among the community.  Your roadmap will also be a critical communication tool to provide the guidance for your community and a tool for your community members to collaborate in the realization of the objectives. 

 

The roadmap provides a critical method to communicate and encourage the acceptance of your objectives among the members of your collaborative community.  The roadmap will provide a template for the tools and methods to integrate new members to the community along with a means to provide guidance and collect input and proposed revisions from your community members.  Do not ever underestimate the importance of a very high level of communication that can be provided by an roadmap that is accepted within your collaborative community.  Another key aspect that your roadmap will support is the definition of the guiding principles along with the accepted technical methods, tools and procedures that will be utilized to support and grow your collaborative community.

 

So, while this may not be the ‘normal’ method or use for a roadmap, I believe it is necessary in this type of collaborative community.  You must develop a roadmap that provides guidelines, methods and procedures because of the very nature of the community that you are developing.

 

In my next posting I will begin to discuss the framework, or plumbing, development and the importance of a ‘standards based’ model to support a flexible, efficient and easily expandable framework to support your extended collaborative community.

 

Now for the audience participation portion of this program……

 

Have you developed a roadmap to solidify these relationships and increase their value to your community?

 

What technologies do you utilized to support your extended supply chain?  How does EDI transactions and the EDI network play into your current extended supply chain and future plans?

 

Have you defined a map of the integration points within your extended supply chain?

In this discussion I thought it would help to expand a bit on determining the sequence of partners and building the collaborative supply chain community.  I’ve discussed in passing a few time the need to identify and group your partners based on their capabilities and their importance to your extended supply chain.  This would be the point where you identify your partners, and in addition the type of partner; are they key suppliers, backup suppliers, etc. 

 

In addition to the functional groupings you must also take into account a technical and capabilities grouping and this is where it can get a little tricky.  This is extremely important to the success of your extended community.  You must identify your partners’ current technology capabilities in order to understand, then you must define the method and frequency of communication.  In addition, you must define the integration or collaboration ‘triggers’, or events, and their frequency based on the type of partner, and the business requirements for the frequency (do you require information at each step along the way of the extended supply chain, or do you simply need to know when a key step has been completed).  This process is an exercise in extended supply chain Business Process Management; defining the processes that identify your extended supply chain and the actions that make up those processes.  As I mentioned in the beginning of this paragraph, this is an extremely important step; it should not be ‘short-cutted’ and should not be taken lightly, it should also involve process definition reviews with your key partners to validate the business process with all of the partners that make up your extended supply chain.

 

This will be an iterative process you will need to follow in order to provide the appropriate level of qualifications and define the appropriate level of details in your extended supply chain Business Process Model to create the value and the strategic plan for developing a community made up of your extended supply chain partners.  This detailed model will also help you to identify the technology that will best support your goals and objectives.  It is also critically important that you are not influenced by your current technologies and capabilities.  First the focus must be on the business process model that most efficiently defines your extended supply chain.  Second you can review the types of collaboration; the timings and the feedback loops; in order to identify the most effective technology and tools to support your extended supply chain community.

 

After you’ve performed a first pass on your technology model, you should then evaluate your partners’ technology capabilities and strengths in order to identify where to start with your community development with your partners.  This is the point where you begin developing your roadmap to delivery of your extended supply chain partner community.  You must take into account your desired end state, your current capabilities and then determine the path from ‘today’ to your end state.

 

The more time and thought you put into this process the greater the value you will realize from your extended supply chain community.

 

In my next posting I will begin to discuss the roadmap development and the importance of a continuous improvement model to delivering the objectives defined in the roadmap.

 

Now for the audience participation portion of this program……

 

How do you currently define your partners within your extended supply chain?  Have you identified the critical partners and their technology capabilities?  Have you developed a roadmap to solidify these relationships and increase their value to your community?

 

What technologies do you utilized to support your extended supply chain?  How does EDI transactions and the EDI network play into your current extended supply chain and future plans?

 

Have you defined a map of the integration points within your extended supply chain?

In this installment I want to begin a discussion on Collaboration in the Supply Chain.  This is a rather nebulous phrase I believe because it can mean so many different things to so many people and organizations.  So, I think that this particular area of practice is gaining in respect for two reasons; one because it is so nebulous that it’s a perfect practice for the management consultant industry; and two because the name is so nebulous and important sounding that I don’t think anyone would admit to not being interested in collaboration in the supply chain.

 

OK, so now I’ve gotten my cynical perspective and comments out of the way so I can begin the meaningful and hopefully value-add portion of this discussion.  I’ve written in the past about getting starting with integration and collaboration across the extended supply chain.  In my last post I brought up the relationship of EDI and the Internet in the collaboration and integration conversation.  There are many more tools available now to support advanced collaboration techniques and requirements, I bring up EDI though because the ‘old’ tools still bring a lot of value to the table.  At this point I hope that you have a foundational understanding of my direction and viewpoints regarding collaboration and the integration of your extended supply chain partners.  I’ve covered the conceptual objectives and some of the technologies that can support the collaboration and integration within the extended supply chain.

 

So I think that its time to cover the timing and sequencing of the integration and collaboration.  (I am starting to use these terms interchangeably in this discussion because I see them as so closely related, and even necessary to be viewed in combination.)  The timing and sequencing are the two key factors in bringing value from the collaboration and integration with your extended supply chain.  I hope that this has become obvious to you also in part at least from my previous discussion topics.  Its very important at this point that you start with a holistic view of your extended supply chain and take the time to identify and group your partners based on the current relationship.  Then I suggest that you must view your extended supply chain partners from an ‘end state’ to define the future groups and relationships. 

 

You must first define your partners and group them into the entities that will make up your extended supply chain community.  This would be the point where you identify suppliers, and in addition the type of supplier; are they key suppliers, backup suppliers, etc.  Then you must identify their current technology capabilities in order to understand and then define the method and frequency of communication.  In addition, you must define the frequency and integration or collaboration ‘triggers’ based on the type of partner, and the business requirements for the frequency (do you require information at each step along the way of the extended supply chain, or do you simply need to know when a key step has been completed).

 

This will be an iterative process you will need to follow in order to provide the appropriate level of qualifications and define the appropriate level of details to create the value and the strategic plan for developing a community made up of your extended supply chain partners.  The more time and thought you put into this process the greater the value you will realize from your extended supply chain community.

 

Now for the audience participation portion of this program……

 

How do you currently define your partners within your extended supply chain?  Have you identified the critical partners and developed a roadmap to solidify these relationships and increase their value to your community?

 

How often do your partners share information, weekly, daily, hourly, or is it event driven?

 

Have you defined a map of the integration points within your extended supply chain?

I have written in the past about the impact the recession has had on the extended supply chain.  I have also written in the past that I see this reduced staffing, experience and capabilities as the ‘new normal’ in most businesses.  So now I have come to what I believe has become the ‘new normal’ in your extended supply chain.  This ‘new normal’ is the importance of collaboration with your extended supply chain partners!  Your extended supply chain partners are the ones that will ‘fill the cracks’ in your experience and capabilities with the experience and manpower to meet the pressures placed on your business by this new age of discontinuous change!  In order to maintain your position in the market you must recognize this as an opportunity and then step up to develop these collaborative partnerships within your extended supply chain in order to meet the demands that will be placed on your business by the increase in discontinuous change.

 

In order to develop these collaborative partnerships across your extended supply chain, you must put into place an integration framework, or foundation, that will provide the flexibility and capabilities to support a highly volatile network of key partners! 

 

So, I know what you’re saying – Its easy to talk about an integration framework but how do I go about putting this together?  Well I would suggest a three step program:

  • Identify the key partners in your extended supply chain.
  • Identify the level of integration and collaboration necessary to achieve value.
  • Identify technology framework available and the skills necessary to support.

 

Many of you will recognize these three steps as the same steps used to implement your EDI programs twenty years ago, and you are correct!  The key difference here is that the tools have changed, and not the least of these tool changes is the introduction of the Internet and collaboration tools!  The Internet provides a pervasive communication network that replaces the Value Added Networks in the early EDI days.  The collaboration tools provide the means to ‘simplify’ the communication methods through a set of common tools and communication protocols.   The beauty of this framework is that every partner in the network, or extended supply chain, is not required to use the same toolset.  Think of your email as an example; it doesn’t matter if you use Gmail, Outlook, Hotmail, Yahoo or any other email program to send, receive and read your email, they will all easily communication because of the standard protocols. Utilizing standard Internet protocols along with XML provide the basic foundational means to build your extended collaboration network; all the other tools just make it easier to utilize these foundational tools.

 

It is critical now that you identify your key partners in your extended supply chain.  These are the partners that you will build your collaboration capabilities and the partners that will aid you in developing, proving and extending your collaboration network.  It goes without saying that these partners will also see the value in developing this collaboration network and provide the initiative and imagination to help drive the initiative forward.  These are the visionaries in your extended supply chain and will provide the ‘secret sauce’ to success in the collaborative initiatives and the willingness to challenge the limits and capabilities of your extended collaborative network.

 

I will discuss various tools and practices to help you implement an extended collaborative supply chain in future installments.  I will also provide additional viewpoints and recommendations from other experts to round out the discussions.

 

Now for the audience participation portion of this program……

 

How do you currently define your partners within your extended supply chain?  Have you identified the critical partners and developed a framework to solidify these relationships?

 

How many different integration tools are in place in your extended supply chain?

 

How do you manage these integration points within your extended supply chain?

 

How has this focus impacted your organization and your team?