The supply chain is still struggling to recover from the significant disruptions it has faced over the past few years, and it’s unlikely to return to a state of stability any time soon. As the fragile supply chain continues to evolve, pressures new and old are driving wedges between trading partners and pushing them apart, impeding collaboration when businesses need it most.
In this blog, we’ll explore the importance of collaboration and reveal how trading partners can work better together amidst supply chain pressures to boost productivity and revenue for both businesses.
Amidst Mounting Pressures, Collaboration is Critical
In our recent report on supply chain collaboration, we surveyed nearly 250 manufacturers, distributors and retailers about their trading agreements, collaborative processes and points of friction. The results were alarming: we discovered a crisis of collaboration between trading partners, marked by rampant misalignment, preventable discord, and stagnating trading relationships at every level of the supply chain.
In the face of mounting challenges, we should be collaborating more, not less. The supply chain is strongest when businesses work together, finding points of synergy and aligning their goals in the interest of mutual growth.
The True Cost of Forgoing Collaboration
When trading partners allow collaboration to falter, once-fruitful strategic partnerships quickly begin to erode. Trading partners fall out of alignment, transparency falters and communication falls by the wayside. Partners struggle to get information and data from each other as ambiguity and delays bring communication to a grinding halt. Soon, simmering conflicts boil over into disputes, and trust evaporates entirely.
When companies give up on collaborating, the whole supply chain suffers. We’re seeing a widespread weakening of trading partnerships, with two-thirds of manufacturers and approximately 60% of distributors reporting stagnation or decline in their relationships. Things don’t look much better for retailers, with a mere 25% reporting stronger trading relationships in the face of external pressures.
What Productive Collaboration Looks Like
To paint a picture of what productive collaboration looks like, it may be helpful to start with what it isn’t.
There are many factors that stand in the way of productive collaboration:
- Inefficient processes or systems
- Data/information silos
- Delayed or unclear communications
- Disparate systems
- Misaligned strategies and goals
- Informal agreements/underuse of contracts
Productive collaboration is defined by strong strategic alignment and a commitment to open and transparent communications between both parties, with trading strategies and programs delineated by clear contracts to avoid ambiguity and conflicts.
If this sounds like your process, you’re on the right track. However, it’s important that you take regular inventory of your trading relationships and collaborative processes to rid them of the obstacles listed above. Just because you’ve broken down a data silo once doesn’t mean it will stay gone, and streamlined processes can quickly grow bloated and slow all over again. Collaboration is a commitment that businesses must consistently work towards – like most skills in life, there’s always room for improvement.
Collaboration Drives Revenue and Productivity
When you maintain a close and open collaborative relationship with your trading partners, you lay the foundations for mutual growth. When you break down data silos and establish a transparent source of truth, your teams work more effectively together, spending more time strategizing instead of chasing each other down for information or updates.
When information is shared openly between trading partners, both parties have greater confidence that their data is correct. Centralized data repositories support greater alignment than disparate systems. In addition, centralized systems face fewer issues with version control, and more eyes on the data means more opportunities to notice and correct mistakes.
Better collaboration means more opportunities for trading partners to grow together and support each other. Strategic trading programs and marketing campaigns are just a few of the tools that businesses use to incentivize mutual growth and help their trading partners compete, but these programs can only succeed upon the foundations of productive collaboration.
Building Trust and Transparency Between Trading Partners
Supporting your collaborative efforts with the right tools and resources is essential to building trust between your trading partners. One of the first steps in this process is establishing transparency with a centralized source of truth.
Implementing a cloud-based deal management program such as the Enable platform can support transparency, alignment and strategic collaboration between you and your trading partners. Maintaining a transparent and centralized source of truth eliminates communication delays and ambiguity in your collaborative processes, as well as the risk of harmful data silos. A collaborative system also serves as a convenient and secure place to manage and store your contracts.
Don’t let inefficient collaboration erode your productivity or stand in the way of opportunities for growth. Streamline your processes with the right tools to work better together.
Download the full report to learn how you can overcome friction and misalignment in your trading relationships to collaborate better together.