In my most recent series I’ve been discussing the many aspects that I believe are extremely important to building the most valuable collaborative extended supply chain network. I feel these concepts and methods I’ve been discussing are extremely important especially in the early stages especially because the concepts of a collaborative extended supply chain network is new. You might think that collaborative networks are not new, and you are absolutely correct. Many are participating in this discussing via LinkedIn which is a very powerful collaborative network. I say that the collaborative extended supply chain network is new and requires additional focus and effort to succeed because the simple fact of the matter is that businesses have, and are, very hesitant to share what they consider their differentiating factors or proprietary practices that make them better than their competitors.
I believe that these generally accepted assumptions and practices are no longer generally applicable. I believe that 20 years ago these assumptions and practices were applicable. This was a time when supply chain software packages were in very early stages and there was a lot of truth in the belief that practices and methods could be important differentiating factors. However, that was twenty years ago and supply chain software capabilities have dramatically improved since then. So now almost any company can implement industry best practices and capabilities without the investments in engineering and analysis that would have been required twenty years ago. These facts bring us to a point where key to success is the ability to execute these practices and capabilities.
Now we are at the point where your supply chain network is extended around the world and across many partners. Based on the assumption that the critical factor to your successful extended supply chain network is the ability to execute, it follows that your extended supply chain partners play a critical role in this success. This is why I say that collaborative concepts and methods are so important. The most effective way to improve execution across an extended supply chain is to focus on improving collaboration across the many partners involved in this extended supply chain network. However, I’m sure that you are also aware of a problem that can come about in a collaborative network, namely coming to a consensus in a large collaborative network. Another point that you must be careful of is that the more people involved in a discussion, the harder it can be to come to a consensus.
This is the reason why I suggested earlier that you analyze your supply chain network and services to identify the best candidates for starting this effort. This analysis should identify the partners that provide a good cross section of key services and are open and interested in collaborating to improve execution and capabilities. In addition it should be a small number of partners to start with so you can work through the early stages of developing the collaboration practices more efficiently. Not only will this allow you to develop the collaborative practices more efficiently, it will also allow you to test and deliver benefits early on to help to build momentum and acceptance at the senior management levels.
And now for the audience participation portion of the show…
Have you contemplated the key partners and functions that make up your extended supply chain? How do you measure the results across the extended supply chain?