In the article “Supply chain collaboration: what’s happening?

” , Authors explains that, collaboration has

been referred to as the driving force behind effective supply chain management and as such, may be
considered the ultimate core capability. The main objective of this article is to assess the current level of
supply chain collaboration and identify best practices.

Collaboration is defined as two or more companies sharing the responsibility of exchanging common
planning, management, execution, and performance measurement information. The current research
examined collaboration within a supply chain context. Supply chain collaboration is the most talked
topics in business today’s. Because customers are now more demanding and competition is escalating.
Thus firms may seek to coordinate cross-firm activities and work reciprocally over time to produce
superior performance.

In the literature review of the article, two primary conceptualization of collaboration have surfaced:
Collaboration as an inter-organizational business process and Collaboration as a foundation of inter-
organizational relationships. When collaboration viewed as a business process, partners work toward
common goal and get benefited both. And when collaboration portrayed as inter-firm linkages, the
parties involved here to accomplish mutual objectives. Supply chain entities create cross-organizational
linkages because they have something to gain. So, collaboration means, firms voluntarily agree to
integrate human, financial or technical resources in order to create business model.

An in-depth qualitative analysis approach was used to further develop the body of knowledge and for
data analysis and subsequent developed of a conceptual model of supply chain collaboration. A survey
was developed following a review of the literature and exploratory interviews with key business people.
A total of 62 completed surveys were received within which 7 respondents confirmed that they did not
have a collaborative relationship but the remaining 55 firms do have such relationships.

Based upon the empirical data- the responses to the survey supplemented with interview material a
model of supply chain collaboration was developed. The proposed model covers the progression of such
relationships including Antecedents, Collaboration, and consequences. If we take a close look to the
model we can see each area has several sub points.

The responses to the question about what’s involved in developing a collaborative relationship centered
in the following areas- strategic intent, internal alignments, relationship orientation, investments, free
flow of information communication and formalization. Strategic intent referred as a roadmap without
which optimal results cannot be obtained. Internal alignment can yield additional dividends by helping
to streamline operations in basic areas such as manufacturing cycles, forecasting methods, customer
service, sales, logistics and information systems. Such alignments can create a seamless customer value
delivery process. Relationship orientation explains that mutual trust can provide a foundation between
collaborative partners and can lead to sharing of critical market based data. Free flow of information
and heightened communication described as “two way street.” The intent of the heightened
communication is to identify opportunities and areas for improvement. Formalization is necessary for
successful collaboration execution.
The second area of the model shows how would be the nature of collaboration. There are several
features explained in this article. If we take a close look at these features then we can see-

Shared information at the center of collaboration: Exchange of information helps collaborative partner
s, jointly work on business development. According to survey respondents, shares information is an
essential ingredient in day –to-day operation.

Joint planning: Joint planning is required to co-align operations as well as capacities of each
collaborative partner. It is closely related to and dependent upon information sharing.

Joint problem solving: Joint problem solving often results in breaking down boundaries between
collaborative partners. Forming cross-functional, cross-organizational teams and co-locating may evolve
into a virtual integration of the supply chain process.

Joint performance measurement: The majority of the respondents stated that common metrics should
be developed and used to determine rewards (e.g. amount and timing, etc.) for successful collaborative
efforts and also to identify performance gaps that need to be addressed. Key performance indicators
(KPIs) are fairly common and typically cover specific targets on costs, productivity, and savings goals.
KPIs are modified at least annually.

Leveraging resource and skill: Leveraging skills is made possible by specialization. Supply chain often
involves mutually leveraging each other’s resource base and skills.

The third area of the model shows the consequences of the collaboration. The potential benefits of
collaboration are-

Efficiency, effectiveness and profitability: Efficiency is the measure of how well expended resources are
utilized; effectiveness refers to the extent to which goals are accomplished. The survey respondents
reported benefits such as efficiency (e.g. cost reduction, reduced inventory, shortened lead-time,
streamlining supply chain process, etc.), effectiveness (improved customer service, increased market
share, increased sales, new product development, etc.), and profitability.

Reinforcement and expansion of the relationship: One final benefit of collaboration is a refocusing of
strategic resources and efforts. As collaborative partners learn from the ongoing relationship, they
modify business practices to better meet each other’s needs. Such calibration ensures that the
relationship remains dynamic, adaptable, and valuable to the involved parties.

Based upon the above model of supply chain collaboration model, three important points can be noted-
First, concerning the nature of collaboration, two essential components of collaborative arrangements
(e.g. cooperation and information sharing) were observed. The respondents recounted their experiences
of working together to plan, implement, and monitor supply chain activities to integrate cross-firm
operations, and to focus on common goal.
Second, the survey respondents placed emphasis on the need to formalize collaboration arrangements
(e.g. detailing of performance metrics as well as goals and objectives) as an important prerequisite and
foundation for collaboration.
Third, collaborations that are successful often result in the development of a new culture and operating
atmosphere.

At last we can conclude with that, Collaboration is good, but – in reality – it is only as good “as you make
it”. You must invest efforts to make it work. Collaboration goals often center on supply chain efficiency
(figuring out better ways to do things) and better inventory control. Examples of good progress were
noted including increased business volume, inventory reductions, decreased lead time, and higher
service levels. The participants shared their experiences and their hopes regarding collaboration. It
became clear that they are committed to collaborative relationships and they are hopeful about what
can be accomplished through focused inter-company efforts. For the most part, they recounted positive
outcomes including improved efficiency, effectiveness, and enhanced market positions