Logistics

The Importance of Collaboration in the Supply Chain

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In the logistic industry, to achieve a joint work, it is vital that both client and supplier are able to know their real capabilities, land their expectations, align their strategic objectives and project a “long term relationship”, with the clear objective of adding value to the project.

Creating a collaborative strategy

In conversation with Drivin, Fernando García, Lecturer of the Otec Logistics Association of Chile A.G. mentions that when considering collaboration among the different actors is “relevant to conscientiously analyze the real value that the chain is giving to the business as a whole. This exercise, apparently simple, is not so. ” According to his words, it is difficult because it requires an internal analysis of the parties “each member of the chain must make an extra effort to look inward and transparent their credentials, real capabilities and opportunities for improvement, to name just a few,” he says.

What are the benefits of working together?

Fernando García explains that a virtuous dynamic, offers benefits in different dimensions. “From an operational perspective, the management and projection of stock, reduction in lead times and the ability to respond, are some positive aspects. At the same time, but from a more strategic vision, the main benefit is the improvement of the relationship between customer and supplier, “he says.

To this he adds, that the establishment of long-term relationships and collaborative work is an objective that in turn entails the creation of mutual trust and stability for all the estates that make up logistic design.

However, he warns “this is not free, it forces us to redesign business systems that create value for a permanently changing customer, demanding quality products and services.”

If collaboration is so beneficial, why is it difficult to achieve?

We know that the chain includes companies involved in the production, handling, storage, transport, distribution and marketing of a product. In addition, there are different agents, such as manufacturers, suppliers, distributors, wholesalers, retailers, transporters, customers and consumers.

According to Logistec, most studies on collaboration in the supply chain have been focused on the area of transport. However, “today the issue of collaborative management crosses the entire chain, from a product being manufactured to being in the hands of a customer.”

Along the same line, Retos en Supply Chain explains that, although the use of IT is vital, today the most important thing, is that all the people involved in the chain must be connected. “Since collaboration is much more complex to implement, it requires strong convictions and win-win mutual agreements.

The key is trust

The administration, design and management of the relationship between all the members of a supply chain leads us to the generation of bonds of trust between the various actors.

Alfons Cornella explained to the Diario of Navarra that in order to collaborate, “trust has to be a basic pillar to establish relationships between companies”

“If you approach cooperation only by trying to capitalize, the result is scarce. If there is no clean game, in which everyone puts on the table what they have, the system does not work, because it is based on the input of all parties. If someone only has the objective to receive, the result does not work, “he says.

Along the same lines, Alberto Porras, consultant GS1 Peru explains to Innova Supply Chain “Logistic collaboration has much to do with sharing and winning. When we talk about collaboration in the supply chain,  we are basically sharing information with the aim of winning all those that are involved. This leads to a change in the internal culture of organizations towards greater openness, communication and trust with the other actors in the chain, being indispensable an adequate leadership from the top “, details.

How does your business address the issue of collaboration?

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Francisca is the Business Development Director of Drivin, a SaaS transportation management solution that generates an optimized delivery plan, improves customer service, and reduces transportation costs by up to 30% from day one.