Why relationships matter in the supply chain and logistics industry
The relationship in supply chain and logistics industry are very critical as it carries with it more benefits that are invaluable. Links help in collaborative relationships, information sharing and improving the supply chain and logistics department in he organization.
Collaboration
In building an effective collaborative relationship with your supply chain partner the one thing that will help you the most to improve communication is your ability to understand the value your supply chain partner needs to receive from the relationship. As an example, your procurement department might believe that your supply partner should cut their price so low that they no longer make a profit. This is simply crazy.
If you make an effort to understand the total value your supply partner needs and help them to receive that total value package, they will perceive you as a great partner and communication will become easier. Only put your energies into activities, services, and so forth that deliver the value to your supply partner that they want.
Of course, all trading partners must share common goals. In other words, if one partner in the chain does not fully cooperate with the overall vision, difficulties will almost certainly develop. Utilizing an outside consultant to mediate issues may work to lessen differences. In some cases, systemic designs may need adjustment to ensure that all parties understand the win-win goals of the relationships. Once the parties grasp the potential for increased corporate value, the true potential for the collaborative efforts can be realized. The resulting relationships, even when moderated by outside consultants, can truly result in improved profits for all participants in supply chain collaboration.
Information Sharing
I sometimes difficult challenge to overcome in collaborating with suppliers and customers involves sharing information. You also have the challenge of integrating inter-company processes. To improve resource utilization among all supply-chain partners and to increase end-consumer satisfaction across the various enterprises a new openness will be necessary for all the cooperating players involved. The challenge to overcome can be intellectual and emotional as few organizational leaders want to divulge their “profit” secrets.
To come-up with a new era of cooperation, a new era of openness and sharing is mandatory for the morphing processes and effective utilization of resources to become successful. There are challenges in information sharing from many perspectives. A frequent perspective is when partners leave the collective, they take with them the collective’s best practices. Utilizing this knowledge outside the collective can be a huge lever against the old collective. There truly is the risk.
Supply Chain Improvements
1. Solving conflict- this is mainly present while dealing with retailers and wholesalers.good relationship helps to have a harmonious channel of distribution.
2. On-time product delivery- communication with the various retailers and customers ensures a smooth delivery of goods when they are needed by the customers without fail or conflict.
In the current era of supply chain management, organizations are more and more realizing the strategic value of overall coordination as the main value creation driver. To achieve coordination, organizational leaders across the board should embrace proper relationship to solve the different issues in the department.
