18 SCS:SUPPLY CHAIN COLLABORATION
are going to sell? Manufacturers may say ‘why should we
invest to help our suppliers run their businesses better?’
At shipping management company Kewill, marketing
director Rob Smith believes that in any case a lot of work
needs to be done before supply chain partners are
sharing information well enough to make effective
business decisions.
He reckons it comes down to the quality of information
exchanged between buyer and supplier in a traditional
collaborative planning, forecasting and replenishment
model. “It is a case of can I trust the information I receive?
Can I share the information with all the stakeholders? Can it
be connected with all the right people?” he says.
Kewill has built its business on the growth in global
sourcing and now supports some 10,000 suppliers. But Smith
points to curious gaps in the use of technology to assist
trade. For example, although some 75 per cent of orders are
now tracked electronically, less than 40 per cent of advance
shipment notices and invoices are sent by EDI.
Many organisations in the supply chain do not have an IT
department. They are not convinced about the return on
investment they may get from collaborative tools. They are
looking for technology that they can pick up and run with, a
process that is becoming a bit easier as the trend towards
software- as-a-service makes
the business of
acquiring and
maintaining IT less of a
risk. Nonetheless, Smith
maintains there is a long way to go.
“Our work has been focused on advance shipping notices
especially with retailers. There are still suppliers who aren’t
able to connect to those documents,” he points out.
Harmonising data
The nuts and bolts of exchanging information often trips
up companies who may have disparate systems which
have the same item under different descriptions. “You
need to harmonise product data across these different
systems,” says Begg.
“Even major SAP users are not running 100 per cent of
their systems on SAP. Managing stores centrally becomes a
problem for big companies because there is often a
scalability problem. But there are limits to collaboration -
small companies with single ERP systems are often too small
for major suppliers to want to do collaboration with.”
For Nigel Montgomery, research director of AMR
Research, companies need to look like a serene swan to
their customers even if their feet are scrabbling away below
the surface. “Product specifications and materials are
SEPTEMBER 2008 SUPPLY CHAIN STANDARD
www.supplychainstandard.com
changing so fast no one has all the skills in-house. You
must collaborate with the people who can provide you
with what you need.
“Collaboration runs through the whole product life cycle
from design, planning and logistics to financial
administration and promotions,” argues Montgomery. “Let’s
say Tesco wants to do a promotion for father’s day that
involves offering a card and a power tool.
“Tesco needs to talk to card maker Hallmark and the
power tool division of Bosch. You have companies that don’t
normally work together, working alongside one another for a
while. It is imperative that the tools are in place to allow this
to happen quickly and easily.”
Lifecycle management
Both Montgomery and Begg are particularly impressed with
Dassault Systemes’ product lifecycle management tool that is
a web-based collaboration platform that enables companies
to work with Dassault’s design software. But the collaborators
don’t need to have the package. They can download a light,
executable file that gives them access to the program.
Through tradition or desire, industries vary in how much
and how well they collaborate.
The pharmaceutical industry does a lot of collaboration,
because it is driven by a need to reduce cost and to comply
with regulations, especially on the traceability of
pharmaceuticals.
High technology has to collaborate because no one
company has all the capability. But grocery, for all the Co-
You have companies that don’t normally
work together, working alongside one
another for a while. It is imperative
that the tools are in place to allow this
to happen quickly and easily.
operative Group’s achievements in this area, tends to
struggle when it comes to collaboration.
“The grocery sector has been slower to adopt demand
planning and forecasting electronically,” declares Smith. “We
have seen this more in the fashion business where they have
longer lead times and need greater visibility into the
manufacturing and delivery details.”
Culture plays a big part too in how well partners
collaborate. Language barriers, differences in business
practice, even the ‘not invented here’ syndrome can conspire
to defeat the most well intentioned supply chain manager.
“One of the dangers of collaboration is that it can lead to
partners blaming each other,” Montgomery warns. “Without
a clear statement of deliverables and understanding of
expectations it is too easy to say it is their fault.”
The days when companies could hope to satisfy their
needs from their own resources are long gone. These days
the supply chain demands that companies collaborate with
scores perhaps hundreds of outside organisations.
And the number of collaborations is likely to get larger as
global sourcing increases the churn rate and volatility of the
supply chain. How effectively companies do it is the key to
commercial success. In the words of Joachim Milberg,
chairman of BMW's supervisory board: “Those who work
alone can only accumulate but those who collaborate
intelligently can multiply."
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