Four Powerful Benefits of Supply Chain Collaboration

July 07, 2022

Source: “4 Powerful Benefits of Supply Chain Collaboration” by QIMA

Collaboration between business partners happens organically after spending enough time together, allowing them to harmonize quality production and ethical working standards. Similarly, supply chain collaboration is when autonomous businesses begin working together to improve operations in their supply chain.

There are two main types of supply chain collaboration:

  • Horizontal collaboration allows organizations at the same stage of the supply chain to share the burden of demand and optimize costs. For example, multiple manufacturers choosing to share the delivery infrastructure of their raw materials.
  • Vertical collaboration is when two or more businesses from different stages in the supply chain increase productivity and performance together. A buyer forming a long-term relationship with one or several suppliers of their product or components is an example of this type of collaboration.

As the popularity of supply chain collaboration continues to grow, both types of partnerships will bring businesses powerful advantages. In 4 Powerful Benefits of Supply Chain Collaboration, QIMA identifies four main benefits of supply chain collaboration:

  • Supply Chain Talent and Partner Retention: Customer retention is understood as a top priority for businesses. Before you can retain happy customers, businesses need to retain top employees and partnerships with the best players in the supply chain. This can be achieved through professional management of supply chain operations and offering suppliers and partners a unified platform on which to collaborate.
  • Lowering Your Long-Term Costs: Compared to one-off partnerships, long-term collaborations will have the most impact on the bottom line. The benefits of long-term supply chain collaboration are practical, straightforward, and felt on a day-to-day basis. Keeping a supplier for the long term provides great collaborative experience and streamlined communication, forgoing the extra time and costs used to repeatedly learn a new supplier’s operation in one-off partnerships.
  • Improving Product Quality and Safety: When working together with collaborators, overcoming challenges and issues becomes much easier, resulting in quick and efficient processes which will benefit consumers, the business, and the entire industry. Using the actionable insight provided by the data, as well as the gained experience of working together, high quality and safety can come easily.
  • Driving Better Ethical Standards: Ethical and sustainable sourcing is an increasingly high priority for consumers and businesses. Collaborating with a supply chain partner allows you to work together towards greater supply chain transparency, promote higher ethical and environmental standards, and exert better leverage over parts of the supply chain that are resistant to positive change.

All in all, collaboration will increase the quality of your product while keeping costs as low as possible.

For more information of supply chain collaboration and how it can be achieved, read the article here.

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