Supply chain management is more concerned about recognising, acknowledging and managing key business linkages and relationships. In so doing, collaboration becomes the order of the day. Collaboration is an admirable business objective but proven to be difficult to attain as evidenced by high profile contractual disputes.
supply chain management with GIBSON SIBANDA
It is important to have a strategic framework to establish and improve collaborative relationships in organisations of all sizes.
Collaborative approaches have been shown to deliver a wide range of benefits, which enhances competitiveness and performance. These include but are not limited to better cost management, cycle and lead time compression, improved resource utilisation, risk management and delivering incremental business value and innovation.
Collaborative relationships can be multi-dimensional, they can be individual one-to-one relationships, but more frequently, they are interlinked and networked relationships which often involve multiple parties, external collaborators or partners or alliance partners, suppliers, various internal divisions and often customers, working together. These relationships are common in business networks, supply chains, clusters, or extended enterprises. It might also be applicable to consortia and joint ventures, where the individual organisations might not be implementing the standard overall. It’s important to note and define key collaborative relationships stages.
The first stage is awareness. Organisations that value collaborative relationships should have an overall strategic corporate policy and processes which lead towards incorporating collaborative working as a recognised approach where it can identify added value. Moreover, an appointment of a senior executive spearheading the review and analysis of areas of strategic collaborations goes a long way to ensure successful implementation of collaborative relationships.
The next step is to have knowledge. This focuses on the development of knowledge against a specifically identified opportunity to create a business case and cost benefit analysis. This should include issues which would influence the overall strategy relating to competencies, training and development, knowledge management, risk management, value analysis and possible exit strategy conditions.
An internal analysis follows after acquisition of knowledge. This step is intended to ensure that organisations undertake a structured assessment of their capability and maturity to successfully engage in a collaborative initiative. In order to ensure that collaboration is not established with a bias towards the performance of the external parties, acknowledgement of internal strengths and weaknesses is of paramount importance.
Partner selection is a crucial stage of collaborative relationship framework. This underscores the need to undertake a structured approach to the identification, evaluation and selection of appropriate partners. Poor selection of a partner is a recipe for disaster! Assess not only the performance aspects of each collaborative partner but also the way in which the two organisations can work together with a more integrated approach for mutual benefit.
Working together follows after partner selection. This focuses on ensuring that the partners establish the appropriate operational structure, governance, roles and responsibilities to effectively and efficiently achieve desired business objectives. At this stage, the organisations establish and agree on a formal foundation for working together, including contractual frameworks or agreement of roles and responsibilities.
Value creation can never be ignored if collaboration is to be successful. The parties should specifically focus on the need to establish approaches that seek to build value out of the joint relationship. Openness and continuous communication about innovative ways of generating value should be the guiding principles. As parties continue to explore value out of the relationship, there is a need to ensure effective measurement and monitoring of the relationship to maintain its optimum performance. Without proper mechanisms to keep the relationship afloat, it can easily fade away and dissolve.
Finally, there should be a clear exit strategy from either party. There is a need to develop and maintain an effective strategy for disengagement where appropriate. Care must be taken in coming up with an exit strategy not to damage the relationship. Poor exit strategy and communication may be costly and might have future damaging consequences emanating from prolonged disputes and failure to recognise the benefits of collaboration.
Gibson Sibanda is a member of the Chartered Institute of Procurement and Supply (MCIPS), general-secretary of Cips Zimbabwe branch. The views expressed in the article are entirely personal. For feedback you may contact him on email@example.com