How do I sabotage the collaboration in my chain?
At Supply Value, our mission is to improve the world sustainably by making organizations work together smarter. We are convinced that results that are unattainable for an individual will be surpassed when you work together. This applies not only to individuals, but also to organizations. However, good cooperation between organizations is very difficult to achieve. In practice, we see that organizations encounter various barriers that hinder cooperation with their chain partners. In this insight, we will discuss which barriers we see most often, and what your organization can do to remove these barriers. In this way we help you to recognize, prevent and remedy the way in which effective collaboration can be sabotaged.
The barriers that we see most often in practice can be roughly divided into 2 topics: IT systems & communication and various interests & resources. IT systems & communication often concerns the problem that organizations use different IT systems that are not compatible with each other, making communication and (confidential) information exchange difficult. Different interests & resources is about the fact that the organizations in the chain must recognize the common interest of effective chain collaboration and be prepared to invest in it. Below we explain which problems can occur and how you can deal with them.
IT systems & communication
One of the most common problems encountered by organizations that collaborate with their supply chain partners is that different organizations often use different IT systems. This complicates cooperation because these systems often do not connect to each other or cannot communicate (sufficiently) with each other. This makes good and efficient information exchange between the chain partners very difficult, while this is one of the most important features of effective collaboration. This often involves confidential information that cannot simply be made public: simply sending an e-mail or opening the cloud to chain partners is not always justifiable. Moreover, it is not only the information exchange systems that can cause problems here, but also, for example, the planning systems. For example, if you want to work more intensively with one of your chain partners in order to shorten the delivery time to the end customer, it is important that the planning software that your chain partner uses can be integrated with the planning software within your organization.
How do organizations deal with this now? There are several ways to overcome the barrier of different IT systems:
- New IT system: The most obvious solution is to let go of the old systems and to implement a new and the same IT system together with your chain partners. Despite the fact that joint purchasing of a new IT system is cheaper than alone, this is still a fairly expensive and time-consuming solution. This means that all data from the old system must be transferred to the new system, and your employees must learn to work with this new system.
- Broker System: A simpler solution is to use an intermediate system, also known as a "broker". This system links the different systems together and translates the information from one system so that the other system understands that information. This way everyone can continue to use their own, trusted system. The costs associated with such a broker are compensated by the savings that the more efficient information exchange entails.
Finally, there are relatively simple solutions for exchanging confidential information. The easiest option is to conclude a Non-Disclosure Agreement. An alternative is to confide in a third party that controls all information from all parties.
Different interests & resources
The second common barrier to chain collaboration concerns the importance of the organizations in the chain. Effective collaboration can only get off the ground if all organizations in the chain pursue the same interests. When chain partners do not yet work together, they do not yet take each other's goals and interests into account: they work in a silo. For good cooperation, you want to break through that silo by drawing up joint goals; however, this can be very tricky due to contradictions in pre-existing goals. For example, it may be that an organization aims to offer its products to the end customer at the lowest possible price, but that the supplier of this organization aims to deliver the highest possible quality with the best materials, and not looks at costs. What we also see happening a lot is that the chain partners give a different priority to joint projects. This then leads to a discussion about the investment and the planning, so that the project cannot be started.
The resources available to a chain partner play an important role in this: effective collaboration usually requires an investment in advance, which is amply paid back later. However, smaller organizations in the chain do not always have sufficient resources to make such an investment. In that case, if the other chain partners are not prepared to bear the costs of the smaller organizations and the investment does not go through, the entire chain will miss out on the benefits of the investment. Moreover, the place where the costs fall is not always the same as the place where the benefits fall. Knowing this, organizations are often very reluctant to make investments that they are not sure will reap the benefits. Finally, it also happens that within a single organization there is a discussion about the importance of collaborative projects: for example, administrators may want to collaborate with the chain partners, but the layers below do not see the benefit of it, or this will not work well. communicated.
Obviously, the latter is the first thing to be solved. It is essential that an organization internally agrees on the need for chain collaboration. Therefore, ensure that everyone sees the benefit of the collaboration, and that there is commitment from top management that is felt throughout the organization. The first step is to clearly formulate the cooperation objective: what exactly are we going to achieve with this cooperation? Communicate this objective clearly to the chain partners and map out who the stakeholders are and what their interests are. Collaboration is often seen as a 'soft' concept, while at its core it revolves around getting more return on investments by better harmonizing each other and realizing economies of scale: something that is actually very 'hard'. It is therefore important to discuss possible conflicting interests, whereby it is inevitable that negotiations will have to be conducted. Therefore, always keep the cooperation objective in mind, so that the common interest is given priority.
When the entire chain recognizes this common interest, this will lead to a change in attitude towards required investments: chain partners with the most resources will be willing to invest more to get the collaboration off the ground. Then to ensure that those who invest more will also benefit more from the benefits, you can consider setting up a fund. Chain partners then deposit their resources into that fund, from which the investments are then paid. By keeping clear in the fund which organization has contributed which part, the income from the investments can also be divided equally among the chain partners. Negotiating too hard and commercially is out of the question; this ruins the relationship before the collaboration has even started. Build trust by promising less and delivering more, and pay attention to each other. By recognizing the different interests that each chain partner has, devising a common plan to meet those interests without losing sight of the cooperation objective, and above all by trusting each other, people are heading in the same direction and good and effective chain collaboration is possible, from which every chain partner can benefit.
Quick Scan chain cooperation maturity
Do you recognize the above barriers in your own organization or with one of your chain partners? Are you curious about how your organization is performing in the field of chain collaboration, and do you want to know what things you can do to improve this performance? Supply Value is currently busy realizing the Quick Scan chain collaboration maturity. By answering the questions from this Quick Scan, you will receive concrete advice and action points free of charge and without obligation to improve the level of cooperation in your chain. Would you like to know more about this Quick Scan? Then read us insight or sign up now via the pre-registration and receive the link immediately when this Quick Scan comes online!
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