How collaboration reduces global supplier risks

| 0 Comments

 

CollaborateRiskManage.jpgOwed to increasing globalisation, organisations are doing business with partners outside of their traditional comfort zones, complicating supply chains with an array of risks and variables that must be managed to avoid disruptions like quality issues, shipment delays or product shortages.


Deciding on the best approach to reduce global supply chain risks has long been analysed by supply chain management professionals.


Collaboration as a method of risk management is one of them: it involves improving visibility and sharing risk-related information across the entire supply chain. This method allows for risks to be spread out across a trading partner network as a practical way of distributing the ability to control risks in the respective areas of each link in the supply chain.


Supply chain agility works in tandem with a collaborative risk management process, where both proactive and reactive measures can be employed to contend with risk. Practices like postponement, multi-sourcing and supplier diversification provide choices for supply chain managers to delay activities or select which suppliers they should source from to avoid possible threats.
 

However, collaboration and the agility that results from a group effort can only be achieved by involving suppliers at every level where significant benefits can be achieved.


Previously, many organisations did not explore effective collaboration with supply chain partners because of a lack of trust. The traditional lack of trust and control prevented organisations from collaborating closely with suppliers, causing friction and redundancy when both parties duplicated the same tasks. With the transparency of shared data and mutual collaboration, organisations are more comfortable sharing responsibilities with suppliers. The recent trend to more open and bi-lateral communication has made this challenge a non-issue. The trust factor is no longer a barrier for developing and maintaining collaborative relationships and most organisations have dismissed this as a concern.


Benefiting from collaboration


Collaboration addresses supply chain risks by avoiding, controlling and evaluating all risk factors across the global supply chain. This includes the entire product lifecycle where risk plays a role. The amount of risk you are capable of minimising is realised in distinctive ways during each point in the process. Examples where more collaborative processes are a key to risk mitigation include:


•  Product Design and Development — most organisations think collaborative product development practices onlytake place between internal teams within a retail organisation, with little interaction from the supplier or service provider. However, by connecting with the factory early in the product development stage, you gain visibility and set expectations with all of the parties involved. These ways of connecting with the factory include sharing forecasts and plans with suppliers earlier in the lifecycle, seeking out innovative new material or products with raw material suppliers, and by reserving capacity or taking a position on raw materials to ensure availability.


•  Production — Risk is reduced by unifying critical data that can be used to make decisions in a single solution, increasing protection and decreasing impending production issues. With collaboration, your teams can mitigate supply chain failures, whether political, economic, or environmental, by analysing diversification across regions, gaining snapshot views of work in progress and identifying potential production delays that might lead to concerns.


•  Logistics — Risk and agility are optimised through real-time visibility into global logistics activities providing the ability to quickly react to demand changes and unexpected disruptions. Also, with increased visibility you can make order and shipment modifications quickly to dodge any incoming obstacles and improve reaction time to customer changes. The shared visibility and collaboration gives suppliers, at each tier, insight into possible dropped styles or order postponements – all leading to a more nimble and responsive supply chain.


By leveraging solutions that collect and share information from multiple technology sources and service providers, it is easier for organisations to access information across supply chain trading partners and reduce global supply chain risks. More importantly, this collaboration can include suppliers across every tier of the supply chain. This gives an organisation the ability to better manage the supply stream by accurately analysing the various options to reduce global sourcing risks.


According to data from Gartner and ARC research, over the past decade companies have collectively spent billions of dollars on PDM, ERP, TMS, WMS and other “big data” systems. In order to effectively use the information from these existing applications, Gartner states that a growing percentage of enterprises will rethink their supply chain execution software portfolios, and adopt cross-functional platforms that support true integrated, end-to-end business processes.


Adapted from an Amber Road report “How Collaboration Reduces Your Global Supplier Risks”

 

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

Career opportunites

Marketing Executive

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
Geographical Area: Midrand GautengSalary: Market related2 Years Marketing ...More

Head: Supply Chain Management (P6)

  • <500 000 >500 000 Limpopo Permanent Procurement Management Supply Chain
North east of the Tropic of Capricorn, just ...More

Purchasing and Supply Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supply Chain
Purchasing and Supply ManagerThe CSIR has a vacancy ...More

Senior Manager Public Sector

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 Senior Manager Public SectorTotal Cost to Company: R1.1mil ...More

Senior Manager: Mining

  • >500 000 Gauteng Industrial Engineer Permanent Projects / Category Management
Senior Manager: MiningTotal Cost to Company: R900k – ...More

SUPPLY CHAIN MANAGER

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
SUPPLY CHAIN MANAGER(Total Cost to Company R750k – ...More

Master Data Management Advisor

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 MASTER DATA MANAGEMENT ADVISOR(Total Cost to Company R750k ...More

PRO - Performance Reporting

  • >500 000 Permanent Procurement Consultant Procurement Management Projects / Category Management
PRO - Performance ReportingTotal Cost to Company: R800k ...More

PRO - Risk & Governance

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
PRO - Risk & GovernanceTotal Cost to Company: ...More

Supply Chain Site Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Supply Chain Site ManagerTotal Cost to Company R1mil ...More

Chief Financial Officer

  • >500 000 Gauteng Permanent Procurement Officer / Specialist
Chief Financial OfficerTotal Cost to Company R1.5mil – ...More

Process Engineer- WMS

  • <500 000 >500 000 Industrial Engineer Permanent Projects / Category Management Western Cape
Process Engineer- WMS(Total Cost to Company R350K – ...More

Forecast Analyst

  • <500 000 Analyst Permanent Procurement Management Western Cape
Forecast Analyst(Total Cost to Company R350K – R500K) Location: ...More

Group Category Manager: Indirects

  • >500 000 Permanent Procurement Management Projects / Category Management Western Cape
Group Category Manager: Indirects(Total Cost to Company R700K ...More

Group Category Specialist: Chemical

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Group Category Specialist: Chemical(Total Cost to Company R700K ...More

Sourcing Specialist - 3rd party

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Sourcing Specialist - 3rd partyTotal Cost to Company ...More

Global Procurement Lead (Processing)

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
 Global Procurement Lead (Processing)Location: JohannesburgTotal Cost to Company ...More

Global Supplier Performance Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Global Supplier Performance Manager Location: Johannesburg  Cost to ...More

Group Customer Service Lead

  • <500 000 >500 000 Analyst Gauteng Permanent Procurement Officer / Specialist
Group Customer Service Lead  Location: Johannesburg As the ...More

Business Intelligence Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supplier / Business Development
Business Intelligence Manager Location: JohannesburgLead the development, implementation, optimization ...More