How do you manage your supply chain collaboration?

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Demi-Jo Smith, March 24, 2022

Within the manufacturing industry, there is a term that perhaps not everyone uses in everyday life: supply chain collaboration. Because wherever something is made – think of buildings in the construction industry, the cells of solar panels or bicycles in a factory – there may be more collaboration taking place than you would initially think. It could be the case that all parts are made somewhere else, for example. With these kinds of collaborations, many parties are involved in the process. Therefore, it is important that your supply chain collaboration is in order.

A tricky question then, is whether you work with these people because you know them well, or because they deliver good work.

The construction world

Let us take the example of the construction industry. In construction projects, a lot of specialists come together to achieve a qualitatively good result. Think of people who supply tiles, or wood, specialists who make the reinforcement for concrete or plumbers who install drains. They are all part of the chain cooperation. And the same people often return to collaborate with each other. Because the construction industry is, like many other industries, a small world in terms of contacts and partners. A tricky question then, is whether you keep working with a certain partner company because you know them well, or because they deliver good work.

The right partners are vital

How do you know if the people you work with are the right partners for you and your company? You probably go by your feelings. However, feelings have proven to not always be a reliable indicator. It might be that during the previous cooperation, you have welcomed a child into this world, or that your favourite football team has won an important match, or maybe you have experienced some other windfall. These events could have tainted your memories about the time of the collaboration. Human feelings are influencing our judgments. And that could possibly turn out to be unpleasant.

If you work smart and make a profit where you can, you can directly start to take some margins.

The margins are small, so make profits where you can

A fair question would be: does it really matter that much? Well, construction is a world where margins are small: there is a shortage of employees and materials, the prices of materials are therefore high and the supply of projects is large. The market ensures that construction companies compete with each other, in such a way that there is little margin left. However, if you work smart and make a profit where you can, you can start to take some margins. This can be done, for example, by really checking your supply chain collaboration and seeing where improvements could be made.

And now? Data!

And now, we really get to the heart of the matter. How do you judge who is doing a good job and who is not doing so well? Fortunately, you don’t have to make that judgement yourself. Because there is smart software available that provides you with data. And the handy thing about software is: the data on which it’s based, does not lie. You gain insight into the performance of your partners and your processes. Who is not meeting their deadlines? Who regularly makes mistakes and therefore drives up failure costs? These insights are extremely important, because only when you see where things are going wrong, can you really start to improve. And if you improve, you can enlarge margins. Nice, right?