The extended supply chain is increasing in complexity as a result of an increase in discontinuous change, including disruptions across the extended supply chain.  One reaction to this increase in complexity is an increase in the costs that must be expended to support the additional complexity.  Increased complexity will also lead to an increase in the risk of failures again generated by the increased discontinuous change and ever expanding supply chain.  One method, and I believe the best method, to address this complexity in your supply chain is through a strong collaborative partnership program that allows the partnership to leverage the strengths of their partners to overcome the weaknesses and challenges.

Lately I’ve been discussing the power of the collaborative partnership to overcome risks in the network.  The ability of the partners to overcome their individual weaknesses is closely related to the risk mitigation aspect of the partnership.  Afterall, weaknesses lead to risks and overcoming the weakness will, in turn, mitigate the potential risk.  So one important aspect of developing a partnership network is the analysis and definition of the strengths and weaknesses of the partners from both sides.  Remember that while you are evaluating others to engage a partnership, the others are also evaluating you for your abilities to provide value to the partnership.  The sooner you begin to think and engage others with the view that the others are also evaluating your capabilities the sooner you will create truly value added partnerships. 

A SWOT analysis initiative is a key aspect to the internal and external analysis and definition and I would suggest that the SWOT analysis become an iterative process and integral to your continuous improvement process.  I believe the SWOT analysis is the ideal tool to engage your evaluation from an internal and external perspective.  This provides a level playing field to the analysis and a standard basis for the comparison and analysis.  Once you’ve developed your own internal SWOT analysis you can utilize your findings to help to identify the potential partners to address your weaknesses and threats.

To overcome the complexity you must give up a bit of control, this may seem at odds with logic but in reality it is the result of developing the partnership.  Let me use an outsourcing partnership as an example; in this case one organization engages, or partners, with another organization to provide support and services in which the first organization does not have expertise.  In this example, the service required by one organization results from a weakness, or risk, and presents a level of complexity in business that they engage the outsourcing partner to overcome.  The partner brings a strength to address that weakness to the table to support and develop a partnership.

And now for the audience participation portion of the show…

How do you use a SWOT analysis in your current business?  Have you ever tried to develop a SWOT for an external company to evaluate the fit for partnership?  Do you regularly develop a SWOT analysis to evaluate your internal capabilities and needs to address weaknesses?