Wednesday, October 19, 2011

Collaboration in Sustainable Supply Chains

One of the key requirements of successful sustainable supply chains is collaboration. Supply chain collaboration includes practices like sharing distribution to reduce waste. Research demonstrates that a collaborative sustainable supplier “network” outperforms a buyer-centric “mission control” supply chain, resulting in a steady supply over the long term, financial benefits to suppliers and quality assurance. Collaborative approaches to managing supply chain issues can increase efficiency and thereby save costs and increase profits.

Transportation is a significant component of the costs incurred by most supply chains. The role of transportation is even more significant in global supply chains. The success of sustainable supply chains is closely linked to the appropriate use of transportation. One of the ways collaboration can improve efficiency in supply chains is by ensuring that vehicles are not dispatched half-empty. By sharing transportation services, vehicles can increase the likelihood that they are always at or near capacity. Collaboration can help make company supply chains more efficient by ensuring that vehicle capacity is maximized according to regional shipping routes.

Information is at the center of virtually every aspect of business especially in today's dynamic uncertain and highly cooperative environment. Advances in information systems are driving more transparent organizational structures, more strategic alliances, increased emphasis on performance measurement and greater reliance on time-based strategies.

One of the components of the implementation of sustainable supply chain management is information sharing through two-way communication between partners within a supply chain.

The advancement of technology is changing the way companies do business. Companies must harness the power of technology to collaborate with their business partners as never before. A proper IT strategy integrated with a sustainable supply chain strategy can provide a powerful competitive advantage.

Many companies resist collaborative supply chain because they fear a loss of commercial control by working with others. However, in many cases, this fear is largely unwarranted.

By sharing risks across supply chain partners, companies may be able to improve their own performance in increasingly volatile and competitive global markets.

Collaboration throughout supply networks enhance efficiencies and optimize value.

© 2011, Richard Matthews. All rights reserved.

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