Supply chain collaboration is doing the rounds in retail across the globe and for much valid reasons too. Companies that are able to implement a strategic collaborative relation with their trade partners can be sure to reap into the unmatched benefits that it has to offer. CPG and retail supply chain collaboration essentially means the parent company and the trading agents or suppliers forming a kind of a joint venture or a partnership where both these groups can derive a number of advantages in the long run. It is a strategic choice to collaborate. Companies that are able to convince their suppliers or manufacturers to come together to form a joint venture, can witness advantages that will help them to remain competitive and relevant in the market on a sustained basis. With a collaborative relationship in place, both the partners can mutually benefit by enjoying increased revenues, first mover-advantage and a stronger market share. Both can enjoy a solid footing in the market, combined with decreased cost and increased agility and efficiency in operations.
A mutual and symbiotic partnership is what the digital age requires. Given that there is immense competition and companies need to think beyond what’s common, collaboration seems to be a good starting point. But having said that, collaboration is not easy to achieve. Although, collaboration seems to on paper, offer a number of benefits for both parties involved, it is still to be well-accepted throughout industries. There are a number of reasons why it is difficult to achieve company and supplier collaboration. Perhaps the strongest one being differences in long term and short-term goals. The decision for collaborating spans across two separate organizations; organizations which are two separate entities with differences in culture, structure, design, and leadership. On top of that, two different organizations, may or may not be comfortable with sharing vital or sensitive information with each other, making it even more difficult for executing a strong collab plan that is based on transparency. All these are difficult to cut through. The effort must cut across these barriers and all stakeholders must be involved to ensure that the decision is widely implemented and is a success throughout.
If that’s not all, there is always the chance that leadership and the other levels in the organization are not on the same page in terms of what the collaboration is all about. It is extremely important that the right message trickles down the entire org funnel and that the leadership in both the organizations take charge to ensure top down success and that the right amount of resources, be it man or money is devoted to the initiative.
These are tough challenges that companies will face. But, armed with the right plan and right kind of people, they can navigate through the differences and difficulties and improve their prospects of initiating a collaboration with the partner of their choice.
It all starts with collaborating in areas you know are your strengths. Often, companies see collaboration as only an effort to overcome their weakness. In reality, collaboration should never be done only with this as the prime objective. Of course, the whole point of collaboration is not only filling the gaps in your own capabilities but also using this initiative to build on your strengths. And while at it, both parties need to have in place, the right resources and infrastructure so that they can use cross-organizational skills and leverage new ideas and instruments for mutual advantage.
CPG and retail supply chain collaboration can be an outstanding success if companies select their partners based on what their long term strategic goals are and understanding how they can add value to each other. Often, it’s better to collaborate with a supplier that shares similar values and interests, rather than an agent that has several big clients. This way, company can have a partner that is ready to invest time and effort in the collaboration program.
In effect, collaboration solutions initiative can deliver unmatched advantages if the company wisely chooses its partners, based on the understanding of how collaboration will add value to the company. The key here is to consider the advantages for both the companies and focus on leveraging strengths to build an unbeatable and sustainable competitive advantage.