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The Supply Chain Collaboration Journey

Supply Chain Collaboration is the key to evolve our current supply chains into vigorous, customer-ce...

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Posted by Dave Food on Sep 21, 2017 4:46:35 PM
Dave Food

Supply Chain Collaboration is the key to evolve our current supply chains into vigorous, customer-centric and profitable value networks. The supply chain lies no longer with an individual company, now it considers a global network across countries and organisations pursuing a common agenda.


How collaborative is your supply chain becoming?

When retailers first started sharing data with their suppliers in the late eighties, this was mainly done via internally developed technology platforms which provided sales data to all of its suppliers. Pioneering retailers and suppliers learned they could benefit from data sharing and process innovation; working together to build a profit chain and figure out how to break barriers between a retailer and its suppliers benefitting all participants.

The sharing of information translated to lower merchandising cost for retailers, saved suppliers time and expense in planning, yielded inside benefits for both retailers and customers, making the retailer smarter, passing on the savings to the consumer; promotions, product launches and sales curves were now monitored by multiple participants. Retail customers benefited from the best expertise available to supply excellent service at the lowest cost.

How can we move to the next level of Supply Chain Collaboration? Where should we start?

The journey of Supply Chain Collaboration is heading companies to develop their supply chain into collaborative value networks. In the new consumer-driven economy, retailers and manufacturers must learn to collaborate and to focus on the consumer. Customer-centricity is about developing new business models and defining new collaborative processes; collaboration can be a way towards competitive advantage.

Collaboration efforts take both trust and time to yield results. The end result of a Supply Chain Collaboration journey is always a new business model, difficult to replicate and supported by process innovation and new technologies. Equilibrium takes a long time, but it produces a large number of mutually re-enforcing benefits for all involved. The following steps help us define and understand the journey ahead of you:

·        Map the relationships with your various suppliers. Should it be supported by a new improved Supply Chain Collaboration model?

·        Define collaboration templates you can deploy on a large scale and define specific collaboration models for certain classes of suppliers or customers.

·        Establish the gap of current capabilities for each supplier versus a defined collaboration template and choose the right technology to support each category of suppliers.

·        A stepwise approach is advisable. Adopt the right process framework which gives retailers and manufacturers a better understanding about the starting point and anticipated future state of Supply Chain Collaboration.

·        Changes have to be supported by Supply Chain Collaboration templates. They required a clear plan of action supported by a well thought out roadmap.

There are different levels when adopting the Supply Chain Collaboration model.

1.      The most basic level focuses on sharing retail data, point-of-sales data, and real-time visibility to the actual demand. The more your partners know, the more they understand, consequently the more they will care.

2.       Customer Managed Inventory, in which full visibility of inventory on hand, is the key enabler for the process. Replenishment rules, financial agreements about payments must be established by both engaged parties.

3.      This level is a more advanced type of Supply Chain Collaboration model. It takes advantage of a framework such as Collaborative Planning Replenishment and Forecasting. The two parties follow a predefined protocol to share forecasts and replenishment information. The Collaboration now involves both planning and execution. In level 3 Collaboration solutions are packaged and templatised to leverage the benefits of collaboration on large scales configuring differently to address the many situations, systems and process landscape. The shared objective becomes On-Shelf-Availability.

4.      In this level, the orchestration accomplished by all parts requires the access to POS information at the item within store level and to share common planning and execution processes, extended to assortment planning and product launch planning, supported by financial scenario planning.

How collaborative is your supply chain becoming?


Dave Food

Prophetic Technology

M +44 7775 861863

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