If logistics practices had Facebook pages, supply-chain collaboration would earn countless likes.
But don’t confuse interest with ubiquity. Despite collaboration’s clear benefits—and the fact that as many as 94 percent of major companies may be willing to engage in it—most companies still aren’t collaborating as frequently as they could.
The question is, why—and what, if anything, can your company do about it?
One place to start is by looking within your own organization to see if mindsets or statements like the following might be getting in your way.
“We only want to collaborate with highly similar companies.” Taking this myopic approach could substantially reduce your odds of finding a ready, willing and available match in a timely manner, especially if any of these matches happen to be competitors. One survey suggested that only 40 percent of companies would be willing to collaborate with a competitor.
Many kinds of shippers and supply chains have the potential to be an excellent yin to your company’s supply-chain yang, including companies of different sizes, companies that have manufacturing centers close to your drop-off points, or companies that carry products of considerably different density. For best results, cast your net wide.
“We’ll get our suppliers or vendors involved later.” Don’t put your head in the sand and assume that your company’s vendors or customers will automatically want to support any collaborative initiative you start. At the very least, take time to talk with them and share the particulars of how and why you set the collaboration up.
Better yet, consider incentivizing these players for at least a while. Whether these incentives take the form of per-pallet discounts or rebates for clients that will have to alter their ordering or receiving protocols to make your joint deliveries work or shorter payment terms for carriers that will have to cooperate closely with your two companies to sync pick-ups, they’ll go a long way toward giving your arrangement the outside support it needs during its early, formative phase.
“I’m not telling them that.” Collaboration depends on optimal levels of transparency and visibility, including a willingness to share what may seem like sensitive or even proprietary information about products, processes and practices. If your company is too reluctant to disclose such things it could be a recipe for everything from frustration to failure.
No matter how much it goes against your nature, check your ego and your suspicions at the door, even if you need a bit of assistance to do so.
Signing watertight non-disclosure agreements can help a great deal in this regard. So can committing to a formal and frequent communications protocol. However at the end of the day, nothing is a substitute for good old-fashioned trust.
“We’ve gained a lot from our collaboration. But the other company is gaining even more, and that’s a problem.” One of the biggest issues plaguing many collaborative relationships is the perception of inequity, especially if one partner believes it’s investing more but reaping less. Be sure to use clear and highly specific contractual language about which collaborative partners will be responsible for what as well as how savings will be split. That way there will be less room for surprises and complaints along the way.
Your company also may wish to engage the services of a consultant, 3PL, or other jointly-selected professional to serve as your collaboration’s relationship facilitator. This refereed approach often helps substantially reduce concerns about whether or not various participants are playing fair.
No matter how different various collaborative partners’ results may be, each participant should really be evaluating the arrangement in terms of its own performance improvements rather than anyone else’s. As long as your company is realizing significant benefits that it wouldn’t have enjoyed without the collaboration, the chances are good the relationship is worth preserving.
Fabio Duque is global consumer vertical leader at APL Logistics.