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Supply Chain Optimization

Supply chain optimization


By completing the supply chain optimization process, your organization can minimize costs, increase customer satisfaction and improve overall performance. Are you ready to optimize your supply chain?

Read  Also: Order Management-All-in-One

Supply chain collaboration is not a fancy term for knowledge sharing, although it does require multiple organizations in a supply chain to make intelligence available to one another.

Supply chain collaboration does not mean systems integration, even though integrating IT platforms with partners certainly makes collaboration more practical.

So what is supply chain collaboration? In a nutshell, it is what happens when two or more discrete organizations work closely together to meet shared objectives. These objectives are typically focused on cost reduction, customer service improvement, or raising specific aspects of supply chain performance.

 Who is involved in Supply Chain Collaboration

Quite simply, any two or more companies dependent on one another to supply an end-customer should be prepared to collaborate. For example:

  • A retailer might collaborate with a wholesaler or manufacturer from which it purchases goods
  • A manufacturer might collaborate with a raw material supplier to add value for  its end-customers
  • A raw materials supplier might collaborate with one or more transport companies to generate service and costs benefits for its largest manufacturing customers.

An ideal world, every agency involved turning raw materials into goods, selling them and distributing them to business customers or consumers would collaborate, thus maximizing supply chain cost-effectiveness and reliability. As  yet though, that degree of collaboration is more  likely to be the exception than the rule.

Why is Supply chain Collaboration Important?

There was a time when supply chains were, in the main, vertically oriented. A single company might have owned the processes of raw material sourcing, manufacturing, distribution, sales, and marketing, with the entire supply chain falling under the direct control of that one enterprise.

The same is rarely true today. Most supply chains are decentralized, sometimes involving dozens of companies, all playing different roles in the demand/supply cycle. With no single entity having complete control of materials, resources, strategy or service quality, collaboration is the only way to unify the supply chain.

However the concept of supply chain collaboration is not yet mature. In many cases, supply chains still comprise a mix of companies, some of which collaborate with one another, while others maintain traditional supplier/buyer relationships.